The Hirschleifer Model was the first model that our class explored. This model helps to determine whether there will be conflict between two different countries as a result of divergent preferences, perceptions, or a limited opportunity set, or if there is an opportunity for conflict resolution via a settlement region.

In Graph ‘A,’ country and A and country B have difference perceptions (coupled with neutral preferences) of how the recourse distribution will be after a conflict. As this is the case, the equilibrium point falls outside of the recourse frontier, implying that conflict is imminent between the two countries.

Graph ‘B’ illustrates divergent, malevolent preferences (given convergent perceptions). Each country is motivated purely to put themselves in a better position, and wants as many resources as possible. This even means that each country is willing to harm itself in order to ensure that the other country gets less resources.

Lastly, Graph ‘C’ shows the effect of an expanded opportunity set in a world of divergent perceptions with neutral preferences. The larger opportunity set allows for a possible world with peace between country A and country B, despite the divergent perceptions.