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Battlefields and marketplaces

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  • Halvor Mehlum
  • Karl Moene

Abstract

Divided societies in the developing world experience wasteful struggles for power. We study the relationship between political stability and resources wasted in the struggle within a model of competitive power contests. The model of power contests is similar in structure to models describing oligopolistic market competition. This analogy helps us in deriving results that are new to the conflict literature. We show, for example, that the Herfindahl-Hirschman index can be interpreted as a measure of power concentration and that a peace treaty between fighting groups has a parallel in tacit collusion between firms in a market.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 13 (2002)
Issue (Month): 6 ()
Pages: 485-496

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Handle: RePEc:taf:defpea:v:13:y:2002:i:6:p:485-496

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Related research

Keywords: Violent Conflicts; Rent-seeking Games; Herfindahl-Hirschman Index; Oligopolistic Competition; Political Instability;

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References

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  1. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September.
  2. Tangerås, Thomas P. & Lagerlöf, Nils-Petter, 2002. "Ethnic Diversity and Civil War," Working Paper Series 589, Research Institute of Industrial Economics.
  3. Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
  4. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
  5. Friedman, James W, 1979. "Non-Cooperative Equilibria for Exit Supergames," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 147-56, February.
  6. Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
  7. Clark, Derek J & Riis, Christian, 1998. "Competition over More Than One Prize," American Economic Review, American Economic Association, vol. 88(1), pages 276-89, March.
  8. Cowling, Keith & Waterson, Michael, 1976. "Price-Cost Margins and Market Structure," Economica, London School of Economics and Political Science, vol. 43(171), pages 267-74, August.
  9. Grossman, Herschel I, 1994. "Production, Appropriation, and Land Reform," American Economic Review, American Economic Association, vol. 84(3), pages 705-12, June.
  10. Friedman, James W, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Wiley Blackwell, vol. 38(113), pages 1-12, January.
  11. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  12. Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
  13. Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
  14. 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.
  15. Moene, K.O., 1992. "Contested Power," Memorandum 19/1992, Oslo University, Department of Economics.
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Cited by:
  1. repec:ebl:ecbull:v:8:y:2008:i:2:p:1-11 is not listed on IDEAS
  2. Caruso, Raul, 2007. "Conflict and Conflict Managment with Asymmetric Stakes (The Bad-Cop and the Good Cop part II)," MPRA Paper 1438, University Library of Munich, Germany.
  3. Konrad, Kai Andreas & Skaperdas, Stergios, 2005. "Succession rules and leadership rents," Discussion Papers, Research Unit: Market Processes and Governance SP II 2005-13, Social Science Research Center Berlin (WZB).
  4. Silje Aslaksen & Ragnar Torvik, 2006. "A Theory of Civil Conflict and Democracy in Rentier States," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 571-585, December.
  5. Philipp Denter & Dana Sisak, 2010. ""Who's the thief?": Asymmetric Information and the Creation of Property Rights," University of St. Gallen Department of Economics working paper series 2010 2010-27, Department of Economics, University of St. Gallen.
  6. Mehlum, Halvor & Ove Moene, Karl, 2011. "Aggressive elites and vulnerable entrepreneurs - trust and cooperation in the shadow of conflict," Memorandum 16/2010, Oslo University, Department of Economics.

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