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The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game

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  • Cheikbossian, Guillaume

Abstract

This paper analyzes the ability of group members to cooperate in rent-seeking activities in a context of between-group competition. For this purpose, we develop an infinitely repeated rent-seeking game between two groups of different size. We first investigate Nash reversion strategies to support cooperative behavior in both groups, before analyzing double-edge trigger strategies which support cooperation in one group only. These last strategies have the property that cheating on the agreement in the cooperative group is followed by non-cooperation in this group and cooperation in the rival group. The main conclusion is that the set of parameters for which cooperation can be sustained within the larger group as a subgame perfect outcome is as large as that for which cooperation can be sustained in the smaller group. Hence, in contrast to Olsonʼs (1965) celebrated thesis, but in accordance with many informal and formal observations, larger groups can be as effective as smaller groups in furthering their interests.

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  • Cheikbossian, Guillaume, 2012. "The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game," Games and Economic Behavior, Elsevier, vol. 74(1), pages 68-82.
    • Handle: RePEc:eee:gamebe:v:74:y:2012:i:1:p:68-82
    DOI: 10.1016/j.geb.2011.05.003
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    Cited by:

    1. Paul Pecorino, 2016. "Individual welfare and the group size paradox," Public Choice, Springer, vol. 168(1), pages 137-152, July.
    2. James W. Boudreau & Shane Sanders & Nicholas Shunda, 2019. "The role of noise in alliance formation and collusion in conflicts," Public Choice, Springer, vol. 179(3), pages 249-266, June.
    3. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    4. Francesco Trevisan, 2020. "Optimal prize allocations in group contests," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(3), pages 431-451, October.
    5. James Lake & Maia Linask, 2015. "Costly distribution and the non-equivalence of tariffs and quotas," Public Choice, Springer, vol. 165(3), pages 211-238, December.
    6. Wei Hu & Nicolas Treich, 2018. "Intergroup Conflict with Intragroup Altruism," Economics Bulletin, AccessEcon, vol. 38(2), pages 720-724.
    7. Guillaume Cheikbossian, 2019. "Group cooperation against an incumbent," Working Papers hal-02378829, HAL.
    8. Cheikbossian, Guillaume, 2021. "Evolutionarily stable in-group altruism in intergroup conflict over (local) public goods," Games and Economic Behavior, Elsevier, vol. 127(C), pages 206-226.
    9. Cheikbossian, Guillaume, 2012. "The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game," Games and Economic Behavior, Elsevier, vol. 74(1), pages 68-82.
    10. Boudreau, James W. & Shunda, Nicholas, 2015. "Tacit Collusion in Repeated Contests with Noise," MPRA Paper 65671, University Library of Munich, Germany.
    11. Nicolas Querou, 2018. "Interacting collective action problems in the commons," Working Papers hal-02790606, HAL.
    12. James Lake & Maia K. Linask, 2013. "The near-equivalence of tariffs and quotas," Departmental Working Papers 1305, Southern Methodist University, Department of Economics.
    13. Shyh-Fang Ueng, 2021. "Campaigning internally or externally," Annals of Operations Research, Springer, vol. 301(1), pages 245-267, June.
    14. Dhritiman Gupta, 2020. "Prize Sharing Rules in Collective Contests: Towards Strategic Foundations," Discussion Papers 20-01, Indian Statistical Institute, Delhi.
    15. Guillaume Cheikbossian, 2021. "Group cooperation against a hegemon," Journal of Theoretical Politics, , vol. 33(1), pages 25-55, January.
    16. Murray, Cameron, 2020. "Do political donations buy reputation in an elite gift-exchange game?," OSF Preprints fc9rt, Center for Open Science.

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    More about this item

    Keywords

    Collective action; Rent-seeking; Within-group cooperation; Between-group competition; Repeated game;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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