Charles H. Anderton

ON RATIONAL CHOICE THEORY AND THE STUDY OF TERRORISM

When rational choice theory is applied to the study of terrorism, it is important that attention be given to the derived principles of constrained utility maximization. Particularly useful is the Slutsky equation, which rigorously analyzes the quantity response in one activity to a price change in another. By directing attention to assumptions and/or information about compensated cross price elasticities, expenditure shares, and income elasticities, the Slutsky equation can provide critical guidance in both theoretical and empirical analysis.

Economics of arms trade

The end of the Cold War has increased the relative importance of economic causes and consequences of arms transfers. Unfortunately, there is surprisingly little theoretical and empirical development of the economics of arms trade, making it a sub-field of defense economics ripe for foundational contributions. We offer some preliminary steps in this direction by applying simple international trade models to the arms trade.Fields other than economics have made major contributions to our understanding of arms transfers. We review the sub-literature on arms transfers and foreign policy leverage as well as the sub-literature on the relationship between arms trade and war.The central problem of the arms trade literature, for both economists and geopolitical scientists, is how to go beyond the proliferation of (albeit useful) policy position articles, to a more solid base of theoretical and empirical models. A new theoretical synthesis of economics and geopolitics would represent a major breakthrough, but the development of the economics of arms trade must move beyond its incipient stages for this synthesis to occur. Ultimately, it would be desirable to see theoretical and empirical work on the arms trade, narrow the range of outcomes which are regarded as plausible.

Arms Race Modeling

Since Lewis F. Richardsons seminal contribution in arms race modeling, there has been a proliferation of arms race models in journals and books across many disciplines. Despite this proliferation, there are some fundamental methodological problems associated with Richardson-type models and the arms race modeling enterprise in general that have not been adequately addressed. We discuss these methodological problems and offer some suggestions on where the arms race modeling enterprise should head.

Arms Race Models: A Survey and Synthesis

In recent years there has been a significant proliferation of arms race models.’ Numerous factors have been put forth as relevant, and diverse analytical and explanatory approaches have been employed. We thus feel that the time is ripe for a survey designed to synthesize in a systematic way the significant factors covered in arms race models, and in a way that permits operational linkage to world system models. We start in the next section with a presentation of the classic Richardson model and some key extensions of it. In Section 3 we consider in more detail the play of scarce resources, the ties to the domestic economy, and the possibility of a disequilibrium and partial adjustment process in the realization of a desired stock of weaponry. Section 4 introduces utility optimization behavior for a nation. It is first examined in terms of a static tradeoff between civilian goods and security based on both a deterrence and an attack capability with the rival’s weapons stock taken as given. Next, an optimal time path of resources to be allocated to the military is considered when (1) the rival’s time path in weaponry stocks is given and (2) the rival’s time path of resources allocated to the military is strategically managed, which then poses a differential game problem. Strategy is more closely examined in Section 5 . Deterrence and attack capabilities are more precisely defined, zones of mutual deterrence and of attack initiation are established, numbers of casualties, decision rules, and a hypothetical missile war and its payoff are. introduced.

An experimental test of a predator-prey model of appropriation

Abstract Grossman and Kim’s [Predation and production. In: Garfinkel, M.R., Skaperdas, S. (Eds.), The Political Economy of Conflict and Appropriation. Cambridge University Press, New York, 1996, pp. 57–71] predator–prey model predicts that as the effectiveness of offense against defense increases, the equilibrium appropriation effort will change from zero to full to partial predation. We test the model experimentally over a sequence of eight decision periods. The data show a clear and substantial convergence to equilibrium outcomes, with most movement occurring in the first several periods.

An Insecure Economy under Ratio and Logistic Conflict Technologies

A model that integrates production, exchange, and conflict is used to theoretically investigate the economic behavior of groups that experience an erosion of security within a state. The focus of our investigation is the comparative effects of different conflict production functions (i.e., ratio and logistic) and parameters (i.e., weapons productivity, conflict decisiveness) on the predictions of the integrated economy model. The model shows how two major analytical categories of mainstream economics—production and exchange—can be a source of demand for arms as groups attempt to protect their economic opportunities in the face of intrastate insecurity. Conditions are also identified under which the gains from specialized production and exchange dampen the potential for conflict and hence serve as a form of conflict mitigation. Many of the results of the integrated model are shown to be quite sensitive to the technology of conflict.

Appropriation possibilities in a simple exchange economy

Abstract Appropriation possibilities cause relative price, trade volume, and welfare to vary considerably from the predictions of the standard Edgeworth box. When attack effectiveness is low, a tariff designed to punish a nation’s piracy effort expands trade volume, welfare, and security of property. When attack effectiveness is high, the anti-piracy tariff causes the piracy rate to increase and the security of property to fall.

On Disruption of Trade by War: A Reply to Barbieri & Levy

This response counters Barbieri & Levys assessment of Anderton & Carters empirical study of the disruption of trade by war. A close examination of Anderton & Carters results shows significant trade disruption in 17 of 19 long war dyads and in 21 of 27 dyads in total. These results constitute reasonably strong evidence that war disrupts trade.

Conflict and Trade in a Predator/Prey Economy

Predatory possibilities are integrated with production and trade in a hawk/dove model. The model shows how mutually beneficial exchange can subdue hawk playing. It also identifies conditions under which predatory possibilities are so large that hawks dominate the economy. One of the unusual results of the model is nullifying productivity growth, whereby increases in the productivity of each agent, in its area of comparative advantage, causes production and per capita welfare to fall under certain conditions. Productivity increases that lead to nullifying growth occur just before a transition cusp that, if reached, vaults the economy to a dramatically improved state.

The inherent propensity toward peace or war embodied in weaponry

Thomas Schelling argues that armed adversaries face an inherent propensity toward peace or war embodied in their weaponry, geography and military organizations. Inherent propensity is the idea that there are characteristics embodied in the weapons that push adversaries toward peace or war, independent of the goals of the decision‐makers, the political disagreement between adversaries, and misperceptions about mutual resolve and hostility. We theoretically illustrate inherent propensity in conventional and nuclear arms settings using Lanchester and Intriligator war models. Our work extends the Intriligator‐Brito model, identifies when the competing Richardson and Intriligator‐Brito views of the relationship between arms races and war are correct, illustrates the stabilizing/destabilizing effects of alliances, and highlights the importance of arms quality control in the US‐USSR relationship.