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Complete asymptotic analysis of a two-nation arms race model with piecewise constant nonlinearities. (English) Zbl 1233.91222
Summary: A discrete time two-nation arms race model involving a piecewise constant nonlinear control function is formulated and studied. By elementary but novel arguments, we are able to give a complete analysis of its asymptotic behavior when the threshold parameter in the control function varies from $0^+$ to $\infty$. We show that all solutions originated from positive initial values tend to limit one or two cycles. An implication is that when devastating weapons are involved, “terror equilibrium” can be achieved and escalated race avoided. It is hoped that our analysis will provide motivation for further studying of discrete-time equations with piecewise smooth nonlinearities.

91B99Mathematical economics
91B55Economic dynamics
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