In this article, we consider the optimal fiscal strategy of a government interested in maximizing expected social welfare in the face of a potential future security threat. While the common wisdom is that countries facing security threats should seek to bolster their fiscal position in order...

A coastal city can either dispose of recycled effluent by dumping it in the sea, or transfer it to farmers in its hinterland for irrigation. Who should bear the cost of recycling? Three alternatives are employed: a central planner who maximizes the combined utility of city and farmers;...

Intuitively, we would expect that an increase in the military preparations of potential enemies imply that the rival perceives an increase in the likelihood of future conflict. In this paper, we present a simple model that suggests that, surprisingly, the relationship is ambiguous. We find that...

In the defense policy literature, it is widely believed that there is a pronounced bias towards the procurement of a less than optimal number of excessively sophisticated weapons. In this paper, we consider the possibility that this perceived bias is the result of the timing and informational...

In the defense policy literature, it is widely believed that there is a pronounced bias towards the procurement of a less than optimal number of excessively sophisticated weapons. In this paper, we consider the possibility that this perceived bias is the result of the timing and informational...