@article{ref1,
title="Perfect Equilibrium in a Model of Competitive Arms Accumulation",
journal="International economic review",
year="1990",
author="Ploeg, F. van der and Zeeuw, A. J. de",
volume="31",
number="1",
pages="131-146",
abstract="This paper shows that the subgame-perfect Nash strategic equilibrium, which is relevant when countries can monitor their rival's weapon stock, leads to lower levels of arms and higher welfare than the standard open-loop Nash strategic equilibrium for an arms race. This result is derived for a model of competitive arms accumulation, in which two countries face a classic &quot;guns versus butter&quot; dilemma in the form of utilities which depend on consumption, leisure and the characteristic defence. Moreover, it is argued that the perfect equilibrium strategies lead to a more satisfactory strategic underpinning of the well-known Richardson equations.<p />",
language="",
issn="0020-6598",
doi="10.2307/2526633",
url="http://dx.doi.org/10.2307/2526633"
}