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Conflict and Conflict Managment with Asymmetric Stakes (The Bad-Cop and the Good Cop part II)

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Author Info
Caruso, Raul

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Abstract

This paper considers a partial equilibrium model of conflict where two asymmetric, rational and risk-neutral opponents evaluate differently the contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the conflict. The second instrument is assumed to capture positive investments in ‘conflict management’ - labelled as ‘talks’. It will be demonstrated that, under some conditions, an asymmetry in the evaluation of the stake can lead to a concession from one agent to the other. In particular, the agent with the higher evaluation of the stake would make a concession, proportional to the optimal choice of ‘talks’ . The existence of a concession paves the way for establishing a feasible settlement region (FSR) given that both parties can be better off while expending resources in ‘talks’. Eventually the basic model is extended in order to consider the existence of asymmetries in technological capabilities. Whenever the agents exhibit sufficiently asymmetric productive characteristics a FSR can be established even if a concession is not ensured. However a concession can enlarge the FSR. Finally, throughout the paper, the concept of entropy is applied as a tool for the measurement and evaluation of conflict and

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1438.

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Date of creation: Jan 2007
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Handle: RePEc:pra:mprapa:1438

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Related research
Keywords: Conflict Contest Conflict management Asymmetry in evaluation Entropy Returns to Scale Concession Guns Talks.

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Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
D7 - Microeconomics - - Analysis of Collective Decision-Making
H80 - Public Economics - - Miscellaneous Issues - - - General
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior

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References listed on IDEAS
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.:
  1. Konrad, Kai A. & Skaperdas, Stergios, 1997. "Credible threats in extortion," Journal of Economic Behavior & Organization, Elsevier, vol. 33(1), pages 23-39, May. [Downloadable!] (restricted)
  2. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, EconWPA, revised 15 Dec 2004. [Downloadable!]
  3. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier. [Downloadable!] (restricted)
    Other versions:
  4. J. Amegashie, 2006. "A contest success function with a tractable noise parameter," Public Choice, Springer, vol. 126(1), pages 135-144, January. [Downloadable!] (restricted)
  5. Raul Caruso, 2005. "Asimmetrie negli incentivi, equilibrio competititvo e impegno agonistico: distorsioni in presenza di doping e combine," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 1(3), pages 13-38, Dicembre. [Downloadable!]
  6. Gil S. Epstein & Carsten Hefeker, 2003. "Lobbying contests with alternative instruments," Economics of Governance, Springer, vol. 4(1), pages 81-89, 04. [Downloadable!] (restricted)
  7. Alesina, Alberto & Spolaore, Enrico, 2005. "War, peace, and the size of countries," Journal of Public Economics, Elsevier, vol. 89(7), pages 1333-1354, July. [Downloadable!] (restricted)
    Other versions:
  8. Genicot, C. & Skaperdas, S., 2000. "Investing in Confict Management," Papers 00-01-17, California Irvine - School of Social Sciences.
  9. Garoupa, Nuno R & Gata, Joao E, 2002. " A Theory of International Conflict Management and Sanctioning," Public Choice, Springer, vol. 110(1-2), pages 41-65, January. [Downloadable!] (restricted)
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  10. Halvor Mehlum & Karl Moene, 2002. "Battlefields and Marketplaces," Development and Comp Systems 0210001, EconWPA. [Downloadable!]
    Other versions:
  11. Maria Arbatskaya & Hugo Mialon, 2005. "Two-Activity Contests," Emory Economics 0527, Department of Economics, Emory University (Atlanta). [Downloadable!]
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Cited by:
(explanations, 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.)

  1. Raul Caruso, 2007. "Continuing Conflict and Stalemate: A note," Economics Bulletin, Economics Bulletin, vol. 4(17), pages 1-8. [Downloadable!]
    Other versions:
  2. Caruso, Raul, 2007. "THE Economics of Match-Fixing," MPRA Paper 3085, University Library of Munich, Germany. [Downloadable!]
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