Becsi, Zsolt; Lahiri, Sajal - In: Canadian Journal of Economics 40 (2007) 4, pp. 1168-1187
This paper constructs a three-country, specific-factor, trade-theoretic model in which two of the countries are in conflict and where war effort is determined endogenously in a Nash equilibrium. The third country does not take part in the war, but trades with the warring countries. In the...