War has been one of the most destructive forms of interactive behaviour in the world. There has been a vast body of work that try to make better understand of the nature of war and its causes. The various types of inter- and intra-country conflict have received increasing attention by economists in the past few decades. The aim of this thesis is attempting to contribute to the study of conflict. Using a game-theoretic framework, we study the economic causes of inter- and intra-state conflict, and analyse the relationship between political regime and war. Our study reveals the possible mechanisms of conflict escalation by applying bargaining theory, and thus provides a new perspective for understanding the “democratic peace" hypothesis and the feasibility theory as important explanation for the onset of war.