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When does the private provision of a public good prevent conflict?

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  • Jelnov, Artyom
  • Klunover, Doron

Abstract

We consider a two-stage model, in which n players with the same preferences and different incomes compete for a common value prize and then contribute to a pure public good. We derive the sufficient and necessary condition under which there exists a Subgame Perfect Equilibrium in which a contest is not held. In particular, in order to maintain peace, the “poorest” player needs to contribute to the public good in every realization and therefore cannot be too poor. Peace therefore depends on the strength of the weakest player as well as on the value of the prize. The model may help in understanding conflicts between countries with a common interest.

Suggested Citation

  • Jelnov, Artyom & Klunover, Doron, 2020. "When does the private provision of a public good prevent conflict?," Economics Letters, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:ecolet:v:192:y:2020:i:c:s0165176520301609
    DOI: 10.1016/j.econlet.2020.109225
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    References listed on IDEAS

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    1. Luis C. Corchón & Marco A. Marini (ed.), 2018. "Handbook of Game Theory and Industrial Organization, Volume II," Books, Edward Elgar Publishing, number 17978.
    2. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, Decembrie.
    3. Joan Esteban & Debraj Ray, 2011. "Linking Conflict to Inequality and Polarization," American Economic Review, American Economic Association, vol. 101(4), pages 1345-1374, June.
    4. Warr, Peter G., 1983. "The private provision of a public good is independent of the distribution of income," Economics Letters, Elsevier, vol. 13(2-3), pages 207-211.
    5. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    6. John Morgan, 2000. "Financing Public Goods by Means of Lotteries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 761-784.
    7. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
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    Cited by:

    1. Bakshi, Dripto & Dasgupta, Indraneel, 2021. "Internal versus External Rent-Seeking with In-Group Inequality and Public Good Provision," IZA Discussion Papers 14871, Institute of Labor Economics (IZA).
    2. Dripto Bakshi & Indraneel Dasgupta, 2021. "Internal vs. external rent-seeking with in-group inequality and public good provision," Discussion Papers 2021-06, University of Nottingham, CREDIT.

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    More about this item

    Keywords

    Contest; Public good; Conflict;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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