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Quality vs. Quantity in Military Procurement

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  • Rogerson, William P

Abstract

It is often argued that the same expenditures on military procurement would produce a more effective defense if larger numbers of less sophisticated (and thus cheaper) weapons were purchased. This paper shows that such a result can occur even if the military derives no private consumption value from technically sophisticated weapons. Rather, the organization of the decision-making process itself can produce this result. This suggests some possible solutions through organizing decision-making in a different fashion. Copyright 1990 by American Economic Association.

Suggested Citation

  • Rogerson, William P, 1990. "Quality vs. Quantity in Military Procurement," American Economic Review, American Economic Association, vol. 80(1), pages 83-92, March.
    • Handle: RePEc:aea:aecrev:v:80:y:1990:i:1:p:83-92
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    Citations

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    Cited by:

    1. Renaud Bellais, 2013. "Technology and the defense industry: real threats, bad habits, or new (market) opportunities?," Post-Print hal-00947395, HAL.
    2. Susan J. Guthrie & Hines, James R. Jr., 2011. "U.S. DEFENSE CONTRACTS DURING the TAX EXPENDITURE BATTLES of the 1980s," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 731-751, June.
    3. William P. Rogerson, 1993. "Choice of Treatment Intensities by a Nonprofit Hospital Under Prospective Pricing," Discussion Papers 1069, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    4. Kangaspunta, Jussi & Liesiö, Juuso & Salo, Ahti, 2012. "Cost-efficiency analysis of weapon system portfolios," European Journal of Operational Research, Elsevier, vol. 223(1), pages 264-275.
    5. Ivanov, Maxim, 2010. "Informational control and organizational design," Journal of Economic Theory, Elsevier, vol. 145(2), pages 721-751, March.
    6. Renaud Bellais & Daniel Fiott, 2017. "The European defense market: Disruptive innovation and market destabilization," Economics of Peace and Security Journal, EPS Publishing, vol. 12(1), pages 38-45, April.
    7. Milstein, Irena & Tishler, Asher, 2015. "Can price volatility enhance market power? The case of renewable technologies in competitive electricity markets," Resource and Energy Economics, Elsevier, vol. 41(C), pages 70-90.
    8. Kazunori Tanigaki, 2006. "Defense Sector, Armaments-Labor Ratio And National Security," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(1), pages 59-71.
    9. Doh Shin Jeon, "undated". "Relying on the agent in charge of production for project evaluation," Economics Working Papers 623, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 2006.
    10. Andreas Blume & Asher Tishler, 2000. "Security Needs and the Performance of the Defense Industry," CIG Working Papers FS IV 00-04, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    11. Lipow, Jonathan & Plessner, Yakir, 2001. "The Identification Of Enemy Intentions Through Observation Of Long Lead-Time Military Preparations," Discussion Papers 14978, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
    12. Ganuza, Juan-José, 1995. "Optimal procurement mechanism with observable quality," UC3M Working papers. Economics 3963, Universidad Carlos III de Madrid. Departamento de Economía.
    13. Itay Ringel & Asher Tishler, 2011. "The Government Budget Allocation Process and National Security: An Application to the Israeli–Syrian Arms Race," Chapters, in: Derek L. Braddon & Keith Hartley (ed.), Handbook on the Economics of Conflict, chapter 6, Edward Elgar Publishing.
    14. William P. Rogerson, 1993. "Economic Incentives and the Defense Procurement Process," Discussion Papers 1078, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Saar Golde & Asher Tishler, 2004. "Security Needs, Arms Exports, and the Structure of the Defense Industry," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(5), pages 672-698, October.
    16. Feinerman, Eli & Lipow, Jonathan, 2001. "Is there a bias toward excessive quality in defense procurement?," Economics Letters, Elsevier, vol. 71(1), pages 143-148, April.
    17. Bernhard Klingen, 2011. "A Public Choice Perspective on Defense and Alliance Policy," Chapters, in: Christopher J. Coyne & Rachel L. Mathers (ed.), The Handbook on the Political Economy of War, chapter 17, Edward Elgar Publishing.
    18. Yongmin Chen & Ron Smith, 2001. "Equilibrium Cost Overruns," Annals of Economics and Finance, Society for AEF, vol. 2(2), pages 401-414, November.
    19. Milstein, Irena & Tishler, Asher, 2012. "The inevitability of capacity underinvestment in competitive electricity markets," Energy Economics, Elsevier, vol. 34(1), pages 62-77.

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