Year: 2025
Type: article
Abstract: We analyze a general equilibrium model of attack and defense with production. One attacker and one defender allocate fixed endowments between producing butter and guns. We characterize the unique interior and unique corner equilibrium, and find that (i) the defenders may spend more resources on conflict than the attacker even without loss aversion or other preferential bias, (ii) the attackers may expend all their resources only in conflict, and (iii) the interior and the corner equilibria cannot coexist. These results may help explain Ukraine's sustained high defense effort and Russia's militarized economy, or the excessive conflict expenditure by Hamas etc.
Source: Economic Inquiry
DOI: 10.1111/ecin.70020
Authors: Subhasish M. Chowdhury, Iryna Topolyan
Institutions: University of Sheffield, University of Cincinnati
Language: English
Topic: Game Theory and Applications
Field: Decision Sciences
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $3,400
Funder: University of Bath
OpenAlex ID: W4415147602