Lugar: Sala de Reuniones del Departamento de Economía nº 2026 (2ª planta del Edificio Los Madroños).

Ponente:  Antonio Nicolò (University of Padua & University Manchester)

Título: Learning it the hard way: conflicts, economic sanctions and military aid (trabajo conjunto con Edoardo Grillo)

Abstract: An attacker and a defender engage in a conflict being uncertain about the attacker’s strength. The conflict conveys information about this strength and if the attacker wins, its aggressiveness goes up. A third party fears the attacker’s aggressiveness and it can intervene to help defeat it. This intervention is risky: if the attacker wins despite the external support, its aggressiveness increases even further. We show that the optimal intervention of the third party is non-monotonic in the attacker’s expected strength. We also show that boosting patriotism is a defensive strategy because resolve to fight forces third party intervention.