This thesis consists of an introduction and two essays. The first essay builds on the notion that revenge and hate can affect the outcomes associated with civil wars. Both hate and revenge can increase the amount of resources used for fighting. Nonetheless, due to the destruction involved in war, the possibility of bargaining exists. I analyze how hate and revenge can have different effects on the bargaining set. Hate can only make the bargaining set smaller, but revenge can eliminate the bargaining possibility altogether. Even when a group does not hate the other, its utility will be affected by the other group's hatred.

The second essay considers alternative ways of compensating those who actively participate in conflict, and thus face the risk of death. In the analysis, the rich hire those with the lowest opportunity cost i.e. the poor. Hiring the poor and paying them before combat, which includes compensation for risk of death and offering them a looting contract will give different outcomes in terms of the number of people fighting and death toll. I also examine the conditions under which the equilibria are stable with respect to the methods of payment. Making the risk of death endogenous does not change the results. I also consider the case when the rich fight for themselves and compare it to the case when poor are hired to fight. By hiring the poor to fight on their behalf, rich can transfer the risk of death associated with actively participating in the war.