A DynamicModel of Conflict and Appropriation
AbstractThis paper conducts the analysis of conflict and appropriation by extending the static contest models such as Hirshleifer (1991, 1995) and Skaperdas (1992) to a continuoustime, differential game setting. This paper shows that there is a unique Markov perfect equilibrium (MPE) strategy, which may be linear or nonlinear depending on the structural parameters of the model, when strategies are defined over the entire state space. We show that 'partial cooperation' can be seen as a long-run response to conflict. In particular, we find that a decrease in the effectiveness of appropriation, the depreciation rate of a common-pool stock which is subject to appropriation or the rate of time preferences or an increase in the 'degree of noise' improves the degree of 'partial cooperation' and thus the welfare of an anarchic society in the long run.
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Bibliographic InfoPaper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 733.
Date of creation: Oct 2010
Date of revision:
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Postal: Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501
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More information through EDIRC
Conflict; Cooperation; Differential Game; Markov Perfect Equilibrium; Nonlinear Markov strategy;
Other versions of this item:
- Eggert, Wolfgang & Itaya, Jun-ichi & Mino, Kazuo, 2011. "A dynamic model of conflict and appropriation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 167-182, April.
- Eggert, Wolfgang & Itaya, Jun-ichi & Mino, Kazuo, 2011. "A dynamic model of conflict and appropriation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 167-182.
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-06 (All new papers)
- NEP-GTH-2010-11-06 (Game Theory)
- NEP-ORE-2010-11-06 (Operations Research)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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