term 2 - military conflict Flashcards
what are the sunk costs in the military conflict contest?
the sunk costs are the waste of resources spent on destructive commodities that are otherwise unproductive and non-consumable
what is the definition of a military conflict?
a military conflict involves a dispute over some resource e.g territory,capital, natural resources etc which inidicates some degree of absence in property right over the resource
what type of contest is military conflict?
it is a noisy contest. there are many factors that can influence the outcome such as tatical superiority and natural events. thus superiority in investments on destructive means do not guarantee a victory.
what is the disadvantage of the classic model of conflict?
its a partial equillibrium model ie it solely studies one market without an explict trade off between consumable and destructive goods
what do the gunds and butter model explicitly assume about the countries and what are the implications?
what is the framework for the guns and butter conflict model?
two countries i=1,2 possess a secure land T_i >0 and some labour force L_i>0. they have a dispute over contested land T_0 >0. each country produces oil from the land in a one to one rate. labour is utilitised to produce butter B_i>=0 and guns G_i>=0 in a one to one rate and L_i=B_i + G_i where oil and butter are final goods consumed by the citizens of the country. the representative consumer in country i has the cobb douglas preferences for oil and butter U_i(O,B)=O_i^a*B_i^b where a belongs (0,1) and a+b = 1. for a country to have a claim on the disputed land it has to arm. the proportion of benefits from disputed land are shared according to the ratio of the CSF.
what is the formula of the CSF in the butter and guns analysis?
what is the formula for the value of aggregate production in country i?
what is the utility maximsation problem of the representative consumer in the butters and gun model?
what are the marshallian demand functions for oil and butter for country i?
are consumer solutions possible with the utility function shown in oil and butter conflict model?
what is the indirect utility function of the representative consumer?
what are the twoo economic scenarios in the butter and oil conflict models?
in the autarky what is the equillibrium price of butter P^A, how is it derived?
what is an important observation about the equillibrium price of butter P^A in the autarky?
what is the market clearing welfare of the autarky and how is it derived?
where 5 is the equillibrium price of butter, 4 is the indirect utility function of the representative consumer and 3 is the value of aggregate production in country i
what is an observation about the market clearing welfare in the autarky about guns impact on welfare
?
what occurs with equillibrium arming in the autarky?
what is the welfare equation for free trade butter and guns conflict model?
what is the equillibrium arming when L and/or T is not equal between the two countries?
when the L and T are symmetrical between the two countries then the equllibrium welfare under free trade is equal to?
how does the comparison between free trade price and the autarkic price affect the welfare?
from the starting point where free trade price is equal to the autarkic price, what happens when the price decreases.
from the starting point where free trade price is equal to the autarkic price, what happens when the price increases.
