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A New Explanation of Arms Races in the Third World: A Differential Game Model

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  • Cheng-Te Lee

    (Department of International Trade, Chinese Culture University, Taiwan)

Abstract

This paper examines the stability of arms races in the Third World countries and assumes that the utility function is separable between the consumption and the weapon stocks. We find that the military expenditures and the weapon stocks will exhibit stability and overshooting takes place for the optimal control models. Moreover, we prove that the differential game model has an unstable equilibrium, a result opposite of Deger and Sen (1984).

Suggested Citation

  • Cheng-Te Lee, 2007. "A New Explanation of Arms Races in the Third World: A Differential Game Model," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 3(2), pages 161-176, July.
  • Handle: RePEc:jec:journl:v:3:y:2007:i:2:p:161-176
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    arms race; differential game model;

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies

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