Exchange of goods or exchange of blows? New directions in conflict and exchange

Although defense and peace economics has expanded its interest toward post-Cold War violence, our theme is that conflict potential weaves itself into the decisions of consumers, producers, and traders in ways that economists have essentially ignored. This is the lesson of our model which combines Ricardian trade with the potential for appropriation under ratio and logistic conflict technology. The model shows that economic activities like production and exchange are fundamentally altered in the presence of conflict potential. The model also implies that arms rivalry and the technology of conflict exist in non-international forms within the production/exchange economy.