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Bilateral war in a multilateral world: carrots and sticks for conflict resolution

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Author Info
Zsolt Becsi
Sajal Lahiri

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Abstract

This paper constructs a three-country, specific-factor, trade-theoretic model in which two of the countries are in conflict and where war effort is determined endogenously in a Nash equilibrium. The third country does not take part in the war, but trades with the warring countries. In the framework, we examine, inter alia, how war and welfare are affected by globalization and by two instruments available to the third country - one carrot and one stick. Our overall conclusion is that the third parties do have the incentives for, and can play an effective role in, conflict resolution.

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File URL: http://economics.ca/cgi/xms?jab=v40n4/CJEv40n4p1168.pdf
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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 40 (2007)
Issue (Month): 4 (November)
Pages: 1168-1187
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Handle: RePEc:cje:issued:v:40:y:2007:i:4:p:1168-1187

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Find related papers by JEL classification:
F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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This page was last updated on 2009-12-21.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.