Economic Models of Arms Races

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Abstract
Some problems with the current models of arms races are pointed out, and some extensions and reformulations are proposed. Models of strategic exchange serve as building blocks for a more comprehensive variety that attempt to explain decisions about the division of national wealth into civilian and military components. The models take as given essential technological and preferential parameters and derive implied patterns of choice. The source and implications of discontinuity in the function relating postattack stocks of military wealth and the plausibility and results of successive strikes by a single adversary are examined. Bench marks for purely military preference patterns are established and then are modified to account for the desirability of civilian wealth. Portrayal of preferences via reaction curves is developed, and solutions to the problems of their internal and external inconsistency are proposed. Major problems remain, but economic concepts and principles can contribute at least to the statement of the vital issue of arms races.

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