Armed Conflict in Colombia: Application of the Game Theory
21 Pages Posted: 8 Nov 2000
Date Written: June 2000
The document presents an economic model of the insurgency in Colombia like an economically rational illegal activity. The situation is modelled like a dynamic game, whose protagonists are the government, the rebel leader and the farmers. First, the government determines the level of the military spending. After that the insurgent leader studies the situation and makes the decision, what wage will he offer to the rebels. Finally the peasant family decides, what type of activity to choose (legal production, subsistence production at home, military service or the insurgency). The game is solved and the equilibrium strategies are found. Are identified the determinants of the military spending, the volume of the rebel army and the rebel wage. The model explains the bargaining strategy of the rebel leader and offers an analytic view to the cost of the peace agreement. The model shows that the economic growth does not affect the development of the insurgency. It shows a limited role of the peasants in the conflict.
JEL Classification: c7
Suggested Citation: Suggested Citation