Why does Bilbo give the Arkenstone to Bard and the Elvenking? A. He believes it will prevent a war. B. He is angry with Thorin and wishes to end their friendship. C. He feels guilty for having stolen it. D. He wishes to be thought of as an honest hobbit.
I believe the answer is A, as Bilbo gave the Arkenstone of Thrain, 'the Heart of the Mountain', to Bard to aid him in his bargaining with Thorin. So, I'd say to prevent war is a pretty logical answer.
