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Production and Conflict Models Versus Rent-Seeking Models

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  • Kjell Hausken

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Abstract

A production and conflict (P&C) model and a rent-seeking (RS) model are compared for one group, two groups and K groups. Adding a new agent enlarges the pie in the P&C model, but causes the fixed size pie to be allocated on one more rent seeker in the RS model. The total production or rent is distributed within and between groups according to the within-group and between-group decisiveness. Productive and fighting efficiencies and group sizes play a role. The collective action problem is more severe for the RS model. As group size increases, the ratio of within-group to between-group fighting increases marginally toward a constant for the P&C model, while it increases convexly for the RS model. Adding an additional agent to each of two groups is more detrimental to the utilities in RS groups than in P&C groups, while adding a second group of agents when there is already one group of agents gives the reverse result. The severe between-group fighting in the P&C model for many groups causes the P&C model to be preferable for few groups, while the RS model is preferable for many groups. Applications are considered to intergroup migration, inside versus outside ownership, divestitures, mergers and acquisitions, multidivisional versus single-tier firms and U form versus M form of economic organization. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11127-005-1717-3
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 123 (2005)
Issue (Month): 1 (April)
Pages: 59-93

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Handle: RePEc:kap:pubcho:v:123:y:2005:i:1:p:59-93

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Web page: http://www.springerlink.com/link.asp?id=100332

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References

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Citations

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Cited by:
  1. David K. Levine & Salvatore Modica, 2012. "Conflict and the evolution of societies," Working Papers 2012-032, Federal Reserve Bank of St. Louis.
  2. Raul Caruso, 2006. "Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes, (The Good-Cop and the Bad-Cop Game)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 12(1), pages 1.
  3. Raul Caruso, 2008. "Reciprocity in the shadow of threat," International Review of Economics, Springer, vol. 55(1), pages 91-111, April.
  4. David K Levine & Salvatore Modica, 2011. "Anti-Malthus: Evolution, Population, and the Maximization of Free Resources," Levine's Bibliography 786969000000000148, UCLA Department of Economics.
  5. Levitin, Gregory & Hausken, Kjell, 2009. "False targets efficiency in defense strategy," European Journal of Operational Research, Elsevier, vol. 194(1), pages 155-162, April.
  6. Nitzan, Shmuel & Ueda, Kaoru, 2009. "Collective contests for commons and club goods," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 48-55, February.
  7. Hausken, Kjell & Bier, Vicki M., 2011. "Defending against multiple different attackers," European Journal of Operational Research, Elsevier, vol. 211(2), pages 370-384, June.
  8. Hausken, Kjell & Knutsen, John F., 2010. "An enabling mechanism for the creation, adjustment, and dissolution of states and governmental units," Economics Discussion Papers 2010-6, Kiel Institute for the World Economy.
  9. Hausken, Kjell, 2006. "Jack Hirshleifer: A Nobel Prize left unbestowed," European Journal of Political Economy, Elsevier, vol. 22(2), pages 251-276, June.
  10. Kjell Hausken, 2006. "The Stability Of Anarchy And Breakdown Of Production," Defence and Peace Economics, Taylor and Francis Journals, vol. 17(6), pages 589-603.
  11. Caruso, Raul, 2008. "Spesa Pubblica E Criminalità Organizzata In Italia Evidenza Empirica Su Dati Panel Nel Periodo 1997-2003," MPRA Paper 6861, University Library of Munich, Germany.
  12. 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.
  13. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November.
  14. Hausken, Kjell & Ncube, Mthuli, 2012. "Production and Conflict in Risky Elections," UiS Working Papers in Economics and Finance 2012/14, University of Stavanger.

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