Aggressiveness and Redistribution
AbstractIn 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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Bibliographic InfoPaper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse2_2003.
Date of creation: Jan 2003
Date of revision:
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Anarchy; Contests; Redistribution;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- D30 - Microeconomics - - Distribution - - - General
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
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