Energy Real Options as a Predictor of War: 1920s – 2020s

Laurent Gauthier (), Julien Chevallier (), Antoine Parent () and Vincent Touzé ()
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Laurent Gauthier: CAC-IXXI, Complex Systems Institute, ESPRI - Espace, Pratiques sociales et Images dans les mondes Grec et Romain - ArScAn - Archéologies et Sciences de l'Antiquité - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - MCC - Ministère de la Culture et de la Communication - CNRS - Centre National de la Recherche Scientifique
Julien Chevallier: LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis
Antoine Parent: LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis
Vincent Touzé: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: We propose to read wars in history as investment decisions, and develop two distinct forms of real option models in this context, one for preemption and one for reserve accumulation. We then apply these models to analyze the outbreak of wars empirically. Combining two historical datasets on wars and energy prices from 1925, we show that the inclusion of energy prices improves war forecasting. Further, considering real options on commodities helps explain both resource wars and the singularity of the petroleum order.

Keywords: Real options; Energy prices; War; Cliometrics and complexity (search for similar items in EconPapers)
Date: 2025-08-21
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Published in International Finance, 2025, ⟨10.1111/infi.70003⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05206216

DOI: 10.1111/infi.70003

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