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Aggressiveness and Redistribution

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Author Info

  • Dieter Bös
  • Martin Kolmar

Abstract

In this paper we deal with voluntary and compulsory redistribution in an economy where the enforcement of property rights is costly. Two agents engage in a common-pool contest and two types of potential distortions arise: the waste of resources in the contest and the dilution of incentives to produce as a result of the existens of externalities in the conflict equilibrium. We were able to show the following results: (i) In some situations Pareto-improving redistribution occurs voluntarily. (ii) Otherwise, the government may choose an indirect way to improve production in the presence of appropriation: In a situation of partial anarchy in some market redistributive policies in other markets may help to reduce the inefficiency in the anarchic market.

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File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse2_2003.pdf
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Bibliographic Info

Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse2_2003.

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Length: 23
Date of creation: Jan 2003
Date of revision:
Handle: RePEc:bon:bonedp:bgse2_2003

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

Related research

Keywords: Anarchy; Contests; Redistribution;

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