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Reciprocity in the shadow of threat

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  • Raul Caruso

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Abstract

This paper considers a partial equilibrium model of conflict where two asymmetric, rational and risk-neutral opponents evaluate differently a contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the conflict. The second instrument is assumed to capture positive investments in ‘conflict management’ - labelled as ‘talks’. It will be demonstrated that the asymmetry in the evaluation of the stake does constitute a powerful force influencing agents’ behaviour. In particular, (a) whenever the asymmetry in the evaluation of the stake is extremely large there is no room for cooperation and a conflict trap emerges; (b) whenever the degree of asymmetry falls within a critical interval cooperation seems to emerge even if only the agent with the higher evaluation of the stake makes a concession, proportional to the optimal choice of ‘talks’; (c) as the evaluations of the stake converge only reciprocal concessions (capturing a kind of strong reciprocity) made by both agents can pave the way for cooperation. In such a case, the existence of reciprocal concessions paves the way for establishing a potential settlement region (PSR) given that both parties can be better off while expending resources in ‘talks’. Finally, throughout the paper, the concept of entropy is applied as a tool for the measurement and evaluation of conflict and conflict management.

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Bibliographic Info

Article provided by Springer in its journal International Review of Economics.

Volume (Year): 55 (2008)
Issue (Month): 1 (April)
Pages: 91-111

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Handle: RePEc:spr:inrvec:v:55:y:2008:i:1:p:91-111

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Web page: http://www.springer.com/economics/journal/12232

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Related research

Keywords: Conflict; Contest; Conflict management; Concessions; Reciprocity; Asymmetry in evaluation; Statistical entropy; Cooperation; Integrative systems; ‘Guns’ and ‘talks’; D7; D74; D61; D64; F59; H56;

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Citations

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Cited by:
  1. Marco Di Domizio & Mattia Palombini, 2011. "Competitività orizzontale e verticale nel ciclismo professionistico: alcune riflessioni sul circuito pro tour," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(3), pages 35-54, Febbraio.
  2. Raul Caruso, 2009. "Spesa pubblica e criminalità organizzata in Italia: evidenza empirica su dati panel nel periodo 1997-2003," Economia & Lavoro, Fondazione Giacomo Brodolini, issue 1, pages 73.
  3. Carlson Lisa J. & Dacey Raymond, 2012. "A Surprising Result Encountered in Various Extensions of the Traditional Deterrence Game," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(1), pages 1-13, October.
  4. Caruso, Raul, 2007. "Continuing Conflict and Stalemate: A Note," MPRA Paper 2316, University Library of Munich, Germany.
  5. Caruso, Raul, 2007. "THE Economics of Match-Fixing," MPRA Paper 3085, University Library of Munich, Germany.
  6. Raul Caruso, 2009. "Crime and Sport Participation in Itay: Evidence from Panel Data Regional Analysis over the Period 1997-2003.\," Working Papers 0904, International Association of Sports Economists;North American Association of Sports Economists.
  7. Raul Caruso, 2009. "The Basic Economics of Match Fixing in Sport Tournaments," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 39(3), pages 355-377, December.
  8. Raul Caruso, 2009. "Relational Good at Work! Crime and Sport Participation in Italy. Evidence from Panel Data Regional Analysis over the Period 1997-2003," NCER Working Paper Series 47, National Centre for Econometric Research.
  9. Caruso, Raul, 2007. "A Tentative Model of Conflict, Appropriation and Production in a two-sector Economy," MPRA Paper 4053, University Library of Munich, Germany.
  10. Raul Caruso, 2012. "Contest with cooperative behavior: a note," Economics Bulletin, AccessEcon, vol. 32(2), pages 1747-1754.

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