Citation

Wolfson M, Smith R. Defence economics 1993; 4(4): 299-314.

Copyright

(Copyright © 1993, Informa - Taylor and Francis Group)

DOI

10.1080/10430719308404770

PMID

unavailable

Abstract

As a result of allied subsidy and the influence of sunk costs, the marginal cost of the Gulf War to the US was reduced to negligible size. This result is at variance with the Olson-Zeckhauser thesis that in an alliance “the small exploit the large.” A game theoretic alternative explanation suggests that the relation between allies resembles the game of Chicken, successfully played by the US. The ability to shift the marginal costs of war in the short term raises questions about the possible underestimation of long term effects.