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A rational calculus of war and peace: Applying the ROI objective function to military strategy

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  • Steele, Brett D

Abstract

This article furnishes an analytical approach to military strategy by applying a return-on-investment (ROI) model of a commercial industrial firm. A fundamental relationship thus emerges between a military campaign’s profitability and (1) the lethality level and frequency of its discrete attacks, (2) demand-side investments in propaganda design and distribution processes, and (3) supply-side investments in operational design and tactical processes. While presenting the common analytical foundation of military and business strategies, the significant differences between their output’s average-benefit and average- cost functions are revealed. As a result, a systematic means is furnished for analyzing military strategy of both conventional and irregular warfare.

Suggested Citation

  • Steele, Brett D, 2014. "A rational calculus of war and peace: Applying the ROI objective function to military strategy," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 4(1), pages 1-34.
  • Handle: RePEc:gok:ijdcv1:v:4:y:2014:i:1:p:1-34
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    References listed on IDEAS

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    1. Keith Hartley, 2007. "Defense economics: Achievements and challenges," Economics of Peace and Security Journal, EPS Publishing, vol. 2(1), pages 45-50, January.
    2. Yasmine M. Abdelfattah & Aamer S. Abu-Qarn & J. Paul Dunne & Shadwa Zaher, 2014. "The Demand for Military Spending in Egypt," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 231-245, June.
    3. Brauer, Jurgen & van Tuyll, Hubert, 2008. "Castles, Battles, and Bombs," University of Chicago Press Economics Books, University of Chicago Press, number 9780226071633, Febrero.
    4. Efraim Benmelech & Claude Berrebi, 2007. "Human Capital and the Productivity of Suicide Bombers," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 223-238, Summer.
    5. Paul Hallwood, 2013. "Quantifying Greed And Grievance In Civil War: The American War Of Independence," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(5), pages 449-463, October.
    6. Brett D. Steele, 2013. "Unifying the supply-side and demand-side of business strategy with an ROI objective function," International Journal of Engineering Management and Economics, Inderscience Enterprises Ltd, vol. 4(1), pages 18-53.
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