All-pay war

Roland Hodler and Hadi Yektas

No 1098, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: We study a model of war in which the outcome is uncertain not because of luck on the battlefield (as in standard models), but because the involved countries lack information about their opponent. In our model their production and military technologies are common knowledge, but their resources are private information. Each country decides how to allocate its resources to production and warfare. The country with the stronger military wins and receives aggregate production. In equilibrium the country with a comparative advantage in warfare allocates all resources to warfare for low resource levels and follows a non-decreasing concave strategy thereafter. The opponent allocates a constant fraction of its resources to warfare for low resource levels and follows an increasing non-linear strategy thereafter. From an ex ante perspective the country with a comparative advantage in warfare is likely to win the war unless its military technology is much weaker than the opponent’s.

Keywords: Conflict; war; all-pay auction; private information (search for similar items in EconPapers)
JEL-codes: D44 D74 H56 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2010
New Economics Papers: this item is included in nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://fbe.unimelb.edu.au/__data/assets/pdf_file/0018/801072/1098.pdf (application/pdf)

Related works:
Journal Article: All-pay war (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:1098

Access Statistics for this paper

More papers in Department of Economics - Working Papers Series from The University of Melbourne Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Dandapani Lokanathan ().