We construct a dynamic theory of civil conflict hinging on inter-ethnic trust and trade. The model economy is inhabitated by two ethnic groups. Inter-ethnic trade requires imperfectly observed bilateral investments and one group has to form beliefs on the average propensity to trade of the other...

We examine how natural resource location, rent sharing and fighting capacities of different groups matter for ethnic conflict. A new type of bargaining failure due to multiple types of potential conflicts (and hence multiple threat points) is identified. The theory predicts conflict to be more...

The conflict in Northern Ireland was an example of "complex warfare" with both insurgency and sectarian violence. We present a unified model that helps to identify these two forms of conflict from the spatial distribution of violence. The model predicts that tectonic boundaries between...