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Continuing conflict

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  • Maxwell, John W.
  • Reuveny, Rafael

Abstract

A relatively small but growing literature in economics examines conflictive activities where agents allocate their resource endowments between wealth production and appropriation. To date, their studies have employed a one period, static game theoretic framework. We propose a methodology to extend this literature to a dynamic setting, modeling continuous conflict over renewable natural resources between two rival groups. Investigating the system’s steady states and dynamics, we find two results of general interest. First, Hirshleifer’s “paradox of power” is self-correcting. Second, if productive activities cause damage to disputed resources, the introduction of a small amount of conflictive activity enhances social welfare.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 58 (2005)
Issue (Month): 1 (September)
Pages: 30-52

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Handle: RePEc:eee:jeborg:v:58:y:2005:i:1:p:30-52

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References

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  1. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
  2. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  3. Rafael Reuveny & John W. Maxwell, . "Conflict and Renewable Resources," Working Papers 2004-26, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  4. Usher, Dan, 1989. "The Dynastic Cycle and the Stationary State," American Economic Review, American Economic Association, vol. 79(5), pages 1031-44, December.
  5. Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-38, March.
  6. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  7. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
  8. Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-94, July.
  9. Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers 90-91-06a, California Irvine - School of Social Sciences.
  10. Reuveny, Rafael & Maxwell, John W., 1998. "Free trade and arms races: Some thoughts regarding EU-Russian trade," ZEI Working Papers B 14-1998, ZEI - Center for European Integration Studies, University of Bonn.
  11. Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, vol. 3(3), pages 177-200, November.
  12. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
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Cited by:
  1. Adam Jacobsson, 2009. "War and peace—cyclical phenomena?," Public Choice, Springer, vol. 141(3), pages 467-480, December.
  2. Charles Anderton & John Carter, 2004. "Vulnerable Trade: The Dark Side of an Edgeworth Box," Working Papers 0411, College of the Holy Cross, Department of Economics.
  3. John W. Maxwell & Rafael Reuveny & Jefferson Davis, 2007. "Dynamic Winner-take-all Conflict," Working Papers 2007-12, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  4. David Croix & Davide Dottori, 2008. "Easter Island’s collapse: a tale of a population race," Journal of Economic Growth, Springer, vol. 13(1), pages 27-55, March.
  5. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
  6. Matthew Baker & Erwin Bulte, 2010. "Kings and Vikings: on the dynamics of competitive agglomeration," Economics of Governance, Springer, vol. 11(3), pages 207-227, June.
  7. Eggert, Wolfgang & Itaya, Jun-ichi & Mino, Kazuo, 2011. "A dynamic model of conflict and appropriation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 167-182, April.
  8. Alex Coram, 2006. "An asymmetric dynamic struggle between pirates and producers," UMASS Amherst Economics Working Papers 2006-07, University of Massachusetts Amherst, Department of Economics.
  9. Reuveny, Rafael & Maxwell, John W. & Davis, Jefferson, 2011. "On conflict over natural resources," Ecological Economics, Elsevier, vol. 70(4), pages 698-712, February.

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