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The Attack-and-Defense Conflict with the Gun-and- Butter Dilemma

Author

Listed:
  • Subhasish M. Chowdhury

    (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK)

  • Iryna Topolyan

    (Department of Economics, University of Cincinnati, Cincinnati, OH 45221, USA)

Abstract

We analyze a general equilibrium model of attack and defense with production and conflict. One attacker and one defender allocate their fixed endowments either to produce gun or to produce butter, and the volume of guns produced determines the winner in the conflict. If the attacker wins, then it appropriates all the butter produced in the economy; otherwise, each consume only their own butter. We characterize the unique interior and unique corner equilibrium for this game. We find that (i) the defender may spend more resources on conflict than the attacker even without loss aversion or other behavioral biases, (ii) the attacker may expend all their resources only in conflict, and (iii) the interior and the corner equilibria cannot coexist.

Suggested Citation

  • Subhasish M. Chowdhury & Iryna Topolyan, 2024. "The Attack-and-Defense Conflict with the Gun-and- Butter Dilemma," Working Papers 2024003, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2024003
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    File URL: https://www.sheffield.ac.uk/economics/research/serps
    File Function: First version, June 2024
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    More about this item

    Keywords

    Conflict; Production; Gun and Butter; Attack and Defense;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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