Endogenous Destruction in a Model of Armed Conflict: Implications for Conflict Intensity, Welfare, and Third‐Party Intervention

Sanders, Shane; Walia, Bhavneet

doi:10.1111/jpet.12076

Cited by 11 publications

(4 citation statements)

References 18 publications

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“…Military combat involves the use of weapons and warfare, causing destruction of infrastructure and resources (see, e.g. Shaffer, 2006;Chang and Luo, 2013;Smith et al, 2014;and Sanders and Walia, 2014). Lawsuits to settle industrial disputes or to dissolve partnerships are settings in which parties often invest in legal representation by expending the very resources they seek to divide.…”

Section: Introductionmentioning

confidence: 99%

Asymmetric endogenous prize contests

2018

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Section: Introductionmentioning

confidence: 99%

Asymmetric endogenous prize contests

2018

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“…Garfinkel, Skaperdas, and Syropoulos () examine an interesting case where two conflicting countries choose not to trade with each other but do engage in trade with a third country. For issues on how the equilibrium outcome of an interstate conflict is affected by the strategic involvement of a third country, see Chang, Potter, and Sanders (), Chang and Sanders (), and Sanders and Walia ().…”

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confidence: 99%

“…For studies on conflict that takes into account destruction costs see, for example, Chang and Luo (, ), Sanders and Walia (), and Chang, Sanders, and Walia ().…”

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Insecure Resources, Bilateral Trade, and Endogenous Predation: A Game‐Theoretic Analysis of Conflict and Trade

Chang

2020

Southern Economic Journal

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This article analyzes how interstate conflict over resources affects the incentives to trade and how greater trade openness affects the endogenous decisions of arming by enemy countries. We identify conditions under which there is trade between two adversary countries and show that each adversary's arming affects domestic welfare in three different ways. The first is an export-revenue effect, which increases welfare because arming causes export revenue to go up (i.e., there is an arming-induced terms-of-trade improvement). The second is a resource-predation effect, which increases welfare because arming increases the appropriation of a rival country's resource input to produce a consumption good. The third is an outputdistortion effect, which reduces welfare because arming lowers the domestic production of civilian goods. Based on these effects, we show circumstances in which greater trade openness reduces the intensity of arming. We also discuss the implications of resource security asymmetry for conflict and trade.

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“…See, for example, Rowlands and Carment (), Amegashie and Kutsoati (), Chang, Potter, and Sanders (), Chang and Sanders (), Chang, Sanders, and Walia (), and Sanders and Walia ().…”

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Endogenous Destruction in Conflict: Theory and Extensions

Chang

Luo

2016

Economic Inquiry

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This article develops a general equilibrium model of conflict to characterize the implications of endogenous destruction for bargaining and fighting. Specifically, we consider the scenario where two contending parties engage in bargaining to avoid fighting when there are direct costs (e.g., arms buildups) and indirect costs (e.g., destruction to consumable resources) of conflict. Without imposing specific functional form restrictions on conflict, production, and destruction technologies, we show their interactions in determining an optimal decision between fighting and bargaining. We find that, under the shadow of conflict, bargaining is costly as the contending parties always allocate more resources to arming for guarding settlement through bargaining than in the event of fighting. In contrast to conventional thinking that bargaining is Pareto superior over fighting, we show conditions under which fighting dominates bargaining as the Nash equilibrium choice. The positive analysis may help explain the general causes of fighting, without resorting to the assumption of incomplete information or misperceptions. (JEL D74, H56, C7)

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Endogenous Destruction in a Model of Armed Conflict: Implications for Conflict Intensity, Welfare, and Third‐Party Intervention

Cited by 11 publications

References 18 publications

Asymmetric endogenous prize contests

Asymmetric endogenous prize contests

Insecure Resources, Bilateral Trade, and Endogenous Predation: A Game‐Theoretic Analysis of Conflict and Trade

Endogenous Destruction in Conflict: Theory and Extensions

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