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When does universal peace prevail? Secession and group formation in rent seeking contests and policy conflD72icts

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Author Info
Francis Bloch
Santiago S?chez-Pag? ()
Raphael Soubeyran

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Abstract

This paper analyzes secession and group formation in a general model of contest inspired by Esteban and Ray (1999). This model encompasses as special cases rent seeking contests and policy conflicts, where agents lobby over the choice of a policy in a one-dimensional policy space. We show that in both models the grand coalition is the efficient coalition structure and agents are always better off in the grand coalition than in a symmetric coalition structure. Individual agents (in the rent seeking contest) and extremists (in the policy conflict) only have an incentive to secede when they anticipate that their secession will not be followed by additional secessions. Incentives to secede are lower when agents cooperate inside groups. The grand coalition emerges as the unique subgame perfect equilibrium outcome of a sequential game of coalition formation in rent seeking contests.

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Paper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 543.02.

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Handle: RePEc:aub:autbar:543.02

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Related research
Keywords: secession; group formation; rent seeking contests; policy conflicts;

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances

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  1. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004. [Downloadable!]
  2. Michelle R. Garfinkel, 2003. "Stable Alliance Formation in Distributional Conflict," Public Economics 0305001, EconWPA, revised 16 Jun 2003. [Downloadable!]
    Other versions:
  3. Joan Esteban & József Sákovics, 2002. "Olson vs. Coase: Coalitional Worth in Conflict," Economics Working Papers 645, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-24.

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