How Opportunity Costs Decrease the Probability of War in an Incomplete Information Game
نویسندگان
چکیده
How Opportunity Costs Decrease the Probability of War in an Incomplete Information Game This paper shows that the opportunity costs resulting from economic interdependence decrease the equilibrium probability of war in an incomplete information game. This result is strongly consistent with existing empirical analyses of the inverse trade-conflict relationship, but is the opposite of the conclusion reached by Gartzke et al. (2001), who reject the opportunity cost argument in a game-theoretic framework. As a result of this paper’s findings, one cannot dismiss the opportunity cost argument as the explanation why trading nations fight less. Instead this study reaffirms the central position of opportunity costs as the basis for the inverse trade-conflict relationship, thus implying that one need not rely on signaling. JEL Classification: F10, C7, P16
منابع مشابه
Cooperative aggregate production planning: a game theory approach
Production costs in general, and workforce and inventory costs in particular, constitute a large fraction of the operating costs of many manufacturing plants. We introduce cooperative aggregate production planning as a way to decrease these costs. That is, when production planning of two or more facilities (plants) is integrated, they can interchange workforce and products inventory; thus, thei...
متن کاملCooperative vehicle routing problem: an opportunity for cost saving
In this paper, a novel methodology is proposed to solve a cooperative multi-depot vehicle routing problem. We establish a mathematical model for multi-owner VRP in which each owner (i.e. player) manages single or multiple depots. The basic idea consists of offering an option that owners cooperatively manage the VRP to save their costs. We present cooperative game theory techniques for cost savi...
متن کاملApplication of Stochastic Optimal Control, Game Theory and Information Fusion for Cyber Defense Modelling
The present paper addresses an effective cyber defense model by applying information fusion based game theoretical approaches. In the present paper, we are trying to improve previous models by applying stochastic optimal control and robust optimization techniques. Jump processes are applied to model different and complex situations in cyber games. Applying jump processes we propose some m...
متن کاملA New Extended Analytical Hierarchy Process Technique with Incomplete Interval-valued Information for Risk Assessment in IT Outsourcing
Information technology (IT) outsourcing has been recognized as a new methodology in many organizations. Yet making an appropriate decision with regard to selection and use of these methodologies may impose uncertainties and risks. Estimating the occurrence probability of risks and their impacts organizations goals may reduce their threats. In this study, an extended analytical hierarchical proc...
متن کاملOptimal (R, Q) policy and pricing for two-echelon supply chain with lead time and retailer’s service-level incomplete information
Many studies focus on inventory systems to analyze different real-world situations. This paper considers a two-echelon supply chain that includes one warehouse and one retailer with stochastic demand and an up-to-level policy. The retailer’s lead time includes the transportation time from the warehouse to the retailer that is unknown to the retailer. On the other hand, the warehouse is unaware ...
متن کامل