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Defence Commitment and Deterrence in the Theory of War

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  • Vesa Kanniainen

Abstract

The article shows that a defending army, particularly a small one, can fight hard when attacked by a predator. The result arises in the commitment equilibrium of a model with intergenerational altruism. By implication, the article offers a novel theory of deterrence and defence policy. It shows that in the absence of informational constraints, there is a unique army size that is sufficient for deterrence. Under informational restrictions, a pooling equilibrium may exist where a victim with strong intergenerational altruism overinvests in its army, while the victim with a more limited altruism free rides on the information gap of the predator and builds a smaller army. Conditions for the existence of a separating equilibrium are established in terms of the cost of war. It turns out that the optimal defence policy need not satisfy the deterrence requirement. The case of separating equilibrium helps to explain why wars exist in equilibrium.

Suggested Citation

  • Vesa Kanniainen, 2018. "Defence Commitment and Deterrence in the Theory of War," CESifo Economic Studies, CESifo Group, vol. 64(4), pages 617-638.
    • Handle: RePEc:oup:cesifo:v:64:y:2018:i:4:p:617-638.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ify001
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    References listed on IDEAS

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    1. Vesa Kanniainen & Staffan Ringbom, 2018. "Security gradient and national defense – the optimal choice between a draft army and a professional army," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(3), pages 247-267, April.
    2. Poutvaara, Panu & Wagener, Andreas, 2007. "To draft or not to draft? Inefficiency, generational incidence, and political economy of military conscription," European Journal of Political Economy, Elsevier, vol. 23(4), pages 975-987, December.
    3. Kolmar, Martin, 2013. "Group Conflicts. Where do we stand?," Economics Working Paper Series 1331, University of St. Gallen, School of Economics and Political Science.
    4. Carl Bergstrom & Michael Lachmann, 2000. "Alarm Calls as Costly Signals of Anti-Predator Vigilance: The Watchful Babbler Game," Working Papers 00-02-009, Santa Fe Institute.
    5. Smith, Adam, 1759. "The Theory of Moral Sentiments," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1759.
    6. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    7. Brett V. Benson & Adam Meirowitz & Kristopher W. Ramsay, 2014. "Inducing Deterrence through Moral Hazard in Alliance Contracts," Journal of Conflict Resolution, Peace Science Society (International), vol. 58(2), pages 307-335, March.
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    More about this item

    Keywords

    national security; theory of soldier; commitment to defend;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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