Economics of Conflict

The price of modern maritime piracy

by Sami Bensassi

How Costly is Modern Maritime Piracy for the International Community?

by Sami Bensassi

Deterrence in Contests, forthcoming in Economica

by Petros Sekeris

co-authored with Giacomo De Luca

This paper explores the role of deterrence in contests. As a general rule, we show that for a deterrence strategy to... more 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.

Self-Containment: Achieving Peace In Anarchic Settings

by Petros Sekeris

In anarchic settings, the potential rivals are dragged in an arms race that can degenerate in an open war out of... more In anarchic settings, the potential rivals are dragged in an arms race that can degenerate in an open war out of mutual suspicion. We propose a novel commitment strategy for contestants to avoid both arming and fighting. We allow the players to decentralize the two core decisions that determine whether peace or war ensues. While in centralized countries the decision makers are unable to credibly communicate to their foe their willingness not to arm and not to attack, where the two decisions are dissociated there exists scope for not arming with certainty, and hence overcoming the commitment problem that makes war otherwise inevitable. This mechanism complements existing theories on the Democratic Peace.

The Washington Consensus and Armed Conflict: Sketching the Correlations in Health Care and Education

by John Tirman

An attempt to delve into the correlations between structural adjustment policies in the developing world and the onset of armed conflict, this paper is suggestive but not exhaustive in this under-studied area.

Violence and social capital: evidence of a microeconomic vicious circle

by Pierluigi Conzo

Co-authored with L. Becchetti & A. Romeo

We test with a randomized experiment in the slums of Nairobi whether violence suffered during the 2007 political... more We test with a randomized experiment in the slums of Nairobi whether violence suffered during the 2007 political outbreaks affects trustworthiness learning when participants live group experiences and face opportunism and free riding in common pool resource games (CPRGs) between two subsequent trust games (TGs). Our findings document that participants move toward balanced reciprocity after the CPRG, with the exception of those who have experienced directly or indirectly physical violence and/or forced relocation who exhibit significantly less trustworthiness in the second TG round. Results are robust to several robustness checks controlling for selection into victimization.