Does Inequality lead to Conflict?
AbstractThis paper presents a simple model to show how distributional concerns can engender social conflict. They have a two period model, where the cost of conflict is endogenous in the sense that parties involved have full control over how much conflict they can create. We find that anticipated future inequality plays a crucial role in determining the level of conflict in the current period. The model also provides an explanation for why similar levels of inequality may exhibit drastically different levels of conflict. Further, they argue that the link between inequality and conflict may be non-monotonic. [Research Paper No. 2005/34]
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Date of creation: Dec 2010
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conflict; wealth inequality; Nash bargaining;
Other versions of this item:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-LTV-2010-12-11 (Unemployment, Inequality & Poverty)
- NEP-MIC-2010-12-11 (Microeconomics)
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