Two And One Sided Conflict: Effectiveness and Scale in a Ratio Form of Conflict Technology

This paper investigates how resources are allocated in the conflict when the conflict technology is given by a ratio form that has both effectiveness and scale parameters. The analysis shows that the 'paradox of power' as identified by Hirshleifer (1991) is not a general result in the equilibrium of a conflict. In the interior solution of two sided conflict, it is shown that, as resource disparity increases, the less endowed agent becomes more aggressive by allocating a larger fraction of resources to offense and smaller fractions both do defense and production. As offense becomes more effective, the less endowed agent allocates a larger fraction of his resources to offense. However, as scale effect becomes larger, he allocates more resources to offense only when offense is not relatively too much ineffective. In the Nash interior solution of one sided conflict, when offense becomes more effective, the ratio of offense to defense decreases but this reduces the fraction the prey retains of his produced output. However, when scale effect becomes larger, the prey retains a smaller portion of his produced output with a smaller ratio of offense to defense only when offense is sufficiently more effective relative to defense. [C70, D60, D74]