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Prospecting for New IR Theory: Auctions and Strategic Interaction

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Technical Report,01 Jan 2018,28 Feb 2018

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United States Naval War College Newport United States

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International relations theory is much more explanatory in retrospect than predictive in prospect. Persistent contradictions in international relations challenge rational analysis. As James Fearon posits Wars Inefficiency Puzzle, The central puzzle about war, and also the main reason we study it, is that wars are costly but nonetheless recur. Explanations in the current body of theory seem incomplete. A breakthrough will require expanding analysis beyond inward self-study to the outward study of strategic interaction and the interaction mechanisms between cognitive competitors. In prospecting for this new international relations theory, the economics of competitive interaction in auctions may provide a window into strategic interaction more broadly. This paper departs from the last great innovation in applied economics, Prospect Theory, to propose the study of auction interactions as a mechanism to more predictive international relations theory.

Subject Categories:

  • Economics and Cost Analysis

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