Deterrence in Contests

Giacomo De Luca, Petros G. Sekeris

Research output: Contribution to journalArticlepeer-review

Abstract

This paper explores the role of deterrence in contests. As a general rule, we show that for a deterrence strategy to be played by rational agents, it is necessary that the contest be destructive. We show for a very general class of functions that pure strategy deterrence equilibria where contestants deter one another do not exist. A corollary of this finding is that under fairly general conditions, agents should always be expected to engage in contests. Applied to international relations, our results imply that war is always a potential outcome despite deterrence attempts.

Original languageEnglish
Pages (from-to)171-189
Number of pages19
JournalEconomica
Volume80
Issue number317
DOIs
Publication statusPublished - 1 Jan 2013

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