AbstractA 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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Bibliographic InfoPaper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2004-27.
Date of creation: 2004
Date of revision:
Publication status: Published in Journal of Economic Behavior and Organization, 2005
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Postal: 1309 East Tenth Street, Room 451, Bloomington, IN 47405-1701
Web page: http://www.bus.indiana.edu/bepp/
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Conflict; Dynamics; Paradox of Power; Renewable Resources;
Other versions of this item:
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
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