Die Zukunft der deutschen militärischen Luft- und Raumfahrt
Herausforderungen und Handlungsoptionen
Security needs and the performance of the defense industry
Abstract: "Today, leading defense firms are concentrated into just two distinct blocs - those based in the US and those in Western Europe. All US defense firms and most European ones are private. Market structure may thus play an important role in...
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Abstract: "Today, leading defense firms are concentrated into just two distinct blocs - those based in the US and those in Western Europe. All US defense firms and most European ones are private. Market structure may thus play an important role in determining procurement levels as well as defense policies in the US and Europe. This paper focuses on the interactions between defense needs and market structure. It presents a model in which two producer blocs (representing the US and Europe) produce an identical homogeneous defense good. The rest of the world' purchases the defense good from the two producer countries. The security level of each of the two producing countries depends on its purchase of the defense good relative to the amount of defense good purchased by the rest of the world. Each country measures its security level against a target that it sets for itself. The main results of this paper are: 1. Generally, the total world quantity of the defense good is lower when the government
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