Theory and application to the US military

Oren Setter*, Asher Tishler

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


An ever-growing share of defence R&D expenditures is being dedicated to the development and fielding of integrative technologies that enable separate individual systems to work in a coordinated and synergistic fashion as a single system. This study explores the optimal defence budget allocation to the development and acquisition of weapon systems and to the development of integrative technologies. We develop a suitable optimization framework, and then use it to derive the optimal budget allocation and analyse its properties. Finally, we use US defence budget data to calibrate the parameters of the model and provide a quantitative measure for the apparent US military supremacy.

Original languageEnglish
Pages (from-to)133-155
Number of pages23
JournalDefence and Peace Economics
Issue number2
StatePublished - Apr 2007


  • Budget allocation
  • Integrative technologies
  • Research and Development


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