Divide and Conquer: Noisy Communication in Networks, Power, and Wealth Distribution
AbstractIn a society composed of a ruler and its citizens: what are the determinants of the political equilibrium between these two? This paper approaches this problem as a game played between a ruler who has to decide the distribution of the aggregate income and a group of agents/citizens who have the opportunity to revolt if they are unhappy with the distribution. Nevertheless, if too few revolt, the agents become defeated and receive zero consumption, while a successful revolt increases the consumption level of the rebels whereas the ruler receives nothing. Coordinated action by citizens is possible because they form nodes in a communication network. However, communication through the network is noisy, which removes common knowledge about the endowments and could preclude the emergence of collective action among citizens. In this paper, I argue that the network structure and the noise level are determinants of the political equilibrium and wealth distribution. The model explains how the ruler could use propaganda, cooptation and repression to increase his expected utility. The formalization of the game is accomplished using such concepts as p-beliefs and p-dominant strategy (Monderer and Samet, 1989, and Morris and Shin, 2002). Finally, I illustrate the model by applying it to cases in Nigeria and Zaire/Congo.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.33.
Date of creation: Feb 2004
Date of revision:
Non cooperative Games; Networks; Political economy; Development; Political processes; Rent-seeking; Conflict; Alliances; Coalitions;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
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