A Dynamic Model of Conflict and Cooperation
AbstractWe introduce a common-pool contest into a continuous-time, differential game setting to model the dynamic behavior of agents facing a trade-off between socially productive activities and appropriation. We are able to identify multiple Markov perfect equilibrium strategies that are nonlinear in a state space, thus leading the economy to a state where epartial cooperationf occurs. We show that such cooperation can be seen as a response to conflict. We also discuss the consequences of changes in the effectiveness of appropriation, the number of contenders, and the rate of time preferences on contest equilibria.
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Bibliographic InfoPaper provided by Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) in its series Discussion Papers in Economics and Business with number 08-27.
Length: 31 pages
Date of creation: Jul 2008
Date of revision:
Conflict; Cooperation; Differential Game; Markov Perfect Equilibrium; Nonlinear Markov strategy;
Find related papers by JEL classification:
- 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
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- Konrad, Kai A., 2007. "Strategy in contests: an introduction," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
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