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Continuing Conflict

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Author Info

  • John W. Maxwell

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • Rafael Reuveny

    (School of Public and Environmental Affairs, Indiana University)

Abstract

A relatively small but growing literature in economics examines conflictive activities where agents allocate their resource endowments between wealth production and appropriation. To date, their studies have employed a one period, static game theoretic framework. We propose a methodology to extend this literature to a dynamic setting, modeling continuous conflict over renewable natural resources between two rival groups. Investigating the system’s steady states and dynamics, we find two results of general interest. First, Hirshleifer’s “paradox of power” is self-correcting. Second, if productive activities cause damage to disputed resources, the introduction of a small amount of conflictive activity enhances social welfare.

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File URL: http://www.bus.indiana.edu/riharbau/RePEc/iuk/wpaper/bepp2004-27-maxwell-reuveny.pdf
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Bibliographic Info

Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2004-27.

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Date of creation: 2004
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Publication status: Published in Journal of Economic Behavior and Organization, 2005
Handle: RePEc:iuk:wpaper:2004-27

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Keywords: Conflict; Dynamics; Paradox of Power; Renewable Resources;

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References

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  1. Dan Usher, 1986. "The Dynastic Cycle and the Stationary State," Working Papers 671, Queen's University, Department of Economics.
  2. Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-94, July.
  3. Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-38, March.
  4. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
  5. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
  6. Skaperdas, S., 1991. "Cooperation, Conflict And Power In The Absence Of Property Rights," Papers 90-91-06a, California Irvine - School of Social Sciences.
  7. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December.
  8. Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, vol. 3(3), pages 177-200, November.
  9. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  10. Reuveny, Rafael & Maxwell, John W., 1998. "Free trade and arms races: Some thoughts regarding EU-Russian trade," ZEI Working Papers B 14-1998, ZEI - Center for European Integration Studies, University of Bonn.
  11. Rafael Reuveny & John W. Maxwell, . "Conflict and Renewable Resources," Working Papers 2004-26, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  12. Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
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Citations

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Cited by:
  1. Frederick Van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," CESifo Working Paper Series 3244, CESifo Group Munich.
  2. Reuveny, Rafael & Maxwell, John W. & Davis, Jefferson, 2011. "On conflict over natural resources," Ecological Economics, Elsevier, vol. 70(4), pages 698-712, February.
  3. Matthew Baker & Erwin Bulte, 2010. "Kings and Vikings: on the dynamics of competitive agglomeration," Economics of Governance, Springer, vol. 11(3), pages 207-227, June.
  4. Wolfgang Eggert & Jun-ichi Itaya & Kazuo Mino, 2010. "A DynamicModel of Conflict and Appropriation," KIER Working Papers 733, Kyoto University, Institute of Economic Research.
  5. David, DE LA CROIX & Davide, DOTTORI, 2007. "Easter Island’s Collapse : A Tale of a Population Race," Discussion Papers (ECON - Département des Sciences Economiques) 2007005, Université catholique de Louvain, Département des Sciences Economiques.
  6. Charles Anderton & John Carter, 2004. "Vulnerable Trade: The Dark Side of an Edgeworth Box," Working Papers 0411, College of the Holy Cross, Department of Economics.
  7. Adam Jacobsson, 2009. "War and peace—cyclical phenomena?," Public Choice, Springer, vol. 141(3), pages 467-480, December.
  8. Alex Coram, 2006. "An asymmetric dynamic struggle between pirates and producers," UMASS Amherst Economics Working Papers 2006-07, University of Massachusetts Amherst, Department of Economics.
  9. John W. Maxwell & Rafael Reuveny & Jefferson Davis, 2007. "Dynamic Winner-take-all Conflict," Working Papers 2007-12, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.

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