Economic Models of Conflict

Date : 


Course Number: 66-958-01

Academic points: 1 Semester hour (0.5 annual hour)

Dates and hours:

Thursday, May 26 , 2016; 16:00-20:00

Sunday, May 29 , 2016; 16:00-20:00

Tuesday, May 31, 2016; 16:00-20:00


The course is open to  M.A students with thesis, Ph.D. students, staff members and researchers.

Enquiries and registration can be made at the following email address




"They shall beat their swords into plowshares and their spears into pruning hooks. One nation shall not raise the sword against another, nor shall they train for war again."

Isaiah's prophecy has not been realized.  A big puzzle is why there is violence or war, which are costly. Why can't the parties just agree to some allocation, saving them the cost of violence? Among the reasons to be covered are: the difficulty of states to commit; imperfect information by one side about the other; the possibility that reasonable behavior by any one person may lead to bad collective decisions.

The course will use microeconomic theory at the level of an undergraduate microeconomics course. We will also use a fair amount of game theory, though that is not a prerequisite.


Topics and Readings


Data on violence
Pinker, "The surprising decline of violence ".
Krueger and Malekova, "Education, poverty and terrorism: Is there a causal connection?" Journal of Economic Perspectives, (2003), Vol. 17, No. 4. , pp. 119-144.
Krueger, "What makes a terrorist."
Berman, Shapiro, and Felter "Can hearts and minds be bought? The economics of counterinsurgency in Iraq." Journal of Political Economy, (2011), Vol. 119, No. 4, pp. 766-819.


Why engage in costly conflict?

Coase, "The problem of social cost." Journal of Law and Economics, (1980), Vol. 3, pp. 1-44.
Fearon, "Rationalist explanations for war." International Organization, (Summer, 1995), Vol. 49, No.  3, pp. 379-414

Jackson and Morelli, "The reasons for wars--An updated survey." In Coyne, ed. Handbook on the Political Economy of War.
Political benefit: Hess and Orphanides "War politics---An economic, rational-voter framework." American Economic Review, (1995) 85(4), pp. 828-846.
Expressive behavior: Schuessler, "Expressive voting."  Rationality and Society, (2000), 12(1): 87-119.
Herd behavior: Bikhchandani, Hirshleifer and Welch (1998) "Learning from the behavior of others: Conformity, fads, and informational cascades."  Journal of Economic Perspectives, (1998), 12(3), pp. 151-170.

How much to spend on conflict?

Tullock "The welfare cost of tariffs, monopolies, and theft." Western Economic Journal, (1967), 5, pp. 224-232.
Garfinkel and Skaperdas, "Economics of conflict: A survey."  In Sandler and Hartley, eds., Handbook of Defense Economics.

Commitment and bargaining

Muthoo "The economics of bagaining."

Dixit and Nalebuff, "Making strategies credible."

Powell, "War as a commitment problem." International Organization, (2006), 60, pp. 169-203