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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP206 |
DP206 Perfect Equilibrium in a Competitive Model of Arms Accumulation | |
Frederick van der Ploeg; Aart De Zeeuw | |
发表日期 | 1987-11-01 |
出版年 | 1987 |
语种 | 英语 |
摘要 | We consider a model in which two countries are involved in arms accumulation. The West is a decentralized market economy whose government uses optimal taxation to provide a public good, defense. The East is a centrally planned economy. Utility depends on consumption, leisure and defense; defense is a characteristic which is an increasing function of the difference between home and foreign weapon stocks. The cooperative outcome leads to a moratorium on investment in weapons. Two non-cooperative solutions to this differential game are also considered. The first is an open-loop Nash equilibrium solution, which presumes that countries cannot condition their investment in arms on the rival's weapon stocks. The second is a perfect Nash equilibrium solution, which presumes that countries can monitor foreign weapon stocks. The perfect equilibrium solution leads to lower levels of arms and is therefore more efficient, so that a unilateral arms treaty should allow countries to observe their rival's weapon stocks. In other words, verification leads to lower weapon stocks and higher welfare for both countries. The perfect equilibrium solution also provides a more satisfactory strategic foundation for the Richardson equations. |
主题 | International Trade and Regional Economics |
关键词 | Arms accumulation Defense Dynamic games Military spending Monitoring Subgame-perfect equilibrium |
URL | https://cepr.org/publications/dp206 |
来源智库 | Centre for Economic Policy Research (United Kingdom) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/529362 |
推荐引用方式 GB/T 7714 | Frederick van der Ploeg,Aart De Zeeuw. DP206 Perfect Equilibrium in a Competitive Model of Arms Accumulation. 1987. |
条目包含的文件 | 条目无相关文件。 |
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