A Game Theoretic Approach of War with Financial Influences
Mihai Daniel Roman
Bucharest Academy of Economic Studies; Advanced Research Center for Microeconomic and Macroeconomic Cybernetics (CIBEREC)
September 29, 2010
International Conference, New Challenges in the Field of Military Sciences, Budapest, September 2010
During history, an aggressive country seeks to force non-aggressive countries to made many concessions based on military force. In our paper we discuss the situation that one aggressive country is dissatisfied with its current position and try to obtain more concessions from a rival country. To analyze this situation we use a game theory dynamic model in complete and incomplete information. We analyze the countries behavior depending especially on aggressive or non-aggressive strategies and also on battle power. In this context we found conditions to obtain separating and pooling equilibriums for dynamic games in incomplete information. Main result shows that countries behavior depends especially on war costs and on country military power. There are many applications of these types of models, like in Israel - Palestinian war, recent Russian- Georgian conflict or US defense policy.
Number of Pages in PDF File: 10
Keywords: war, negotiation game, repeated game, bargaining, folk theorem, bounded rationality
JEL Classification: H56, C73, C78Accepted Paper Series
Date posted: March 14, 2012
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