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On the Stability of Group Formation: Managing the Conflict Within

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Author Info
Michelle R. Garfinkel (University of California-Irvine)

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Abstract

This paper develops a positive analysis of stable group formation, highlighting the role of conflict management within groups. The analysis is based on a model of sequential conflict, starting with a "winner- take-all" contest for control of some resource. When a group forms, members pool their efforts in that contest and, if successful, apply the resource to a joint production process. While reducing the severity of conflict over the contestable resource relative to the case of individual conflict, the formation of groups adds another layer of conflict---that is, one between the members of the winning group over the distribution of their joint product. The effectiveness of conflict management in enabling groups to resolve this second layer of conflict in more "peaceful" ways involving less "social waste" has some important implications for the equilibrium structure of groups as well as for the allocation of resources.

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File URL: http://129.3.20.41/eps/pe/papers/0312/0312005.pdf
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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0312005.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 38 pages
Date of creation: 18 Dec 2003
Date of revision: 04 Mar 2004
Handle: RePEc:wpa:wuwppe:0312005

Note: Type of Document - pdf; prepared on WinXP; pages: 38; figures: none
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Web page: http://129.3.20.41

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Related research
Keywords: Endogenous group formation; competitive appropriation; conflict management.;

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Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-34, November. [Downloadable!] (restricted)
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    Other versions:
  3. 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. [Downloadable!] (restricted)
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  5. Ray, Debraj & Vohra, Rajiv, 1999. "A Theory of Endogenous Coalition Structures," Games and Economic Behavior, Elsevier, vol. 26(2), pages 286-336, January. [Downloadable!] (restricted)
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  6. Garfinkel, Michelle R., 2004. "Stable alliance formation in distributional conflict," European Journal of Political Economy, Elsevier, vol. 20(4), pages 829-852, November. [Downloadable!] (restricted)
    Other versions:
  7. Todd Sandler & Keith Hartley, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September. [Downloadable!] (restricted)
  8. Stergios Skaperdas, 2003. "Restraining the Genuine Homo Economicus: Why the Economy Cannot Be Divorced from Its Governance," Economics and Politics, Blackwell Publishing, vol. 15(2), pages 135-162, 07. [Downloadable!] (restricted)
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  9. Francis Bloch & Santiago S?chez-Pag? & Raphael Soubeyran, . "When does universal peace prevail? Secession and group formation in rent seeking contests and policy conflD72icts," UFAE and IAE Working Papers 543.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
  10. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September. [Downloadable!] (restricted)
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  11. Esteban, J. & Ray, D., 1999. "Collective Action and Group Size Paradox," Papers 23, El Instituto de Estudios Economicos de Galicia Pedro Barrie de la Maza.
  12. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December. [Downloadable!] (restricted)
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  16. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September. [Downloadable!] (restricted)
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  17. Genicot, C. & Skaperdas, S., 2000. "Investing in Confict Management," Papers 00-01-17, California Irvine - School of Social Sciences.
  18. Herschel I. Grossman, 2001. "The Creation of Effective Property Rights," American Economic Review, American Economic Association, vol. 91(2), pages 347-352, May. [Downloadable!] (restricted)
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  19. Joan Esteban & József Sákovics, 2002. "Olson vs. Coase: Coalitional Worth in Conflict," Economics Working Papers 645, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
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  20. Garfinkel, Michelle R, 1994. "Domestic Politics and International Conflict," American Economic Review, American Economic Association, vol. 84(5), pages 1294-1309, December. [Downloadable!] (restricted)
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Full references

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. Santiago Sanchez-Pages, 2007. "Endogenous Coalition Formation in Contests," ESE Discussion Papers 158, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  2. Alberto Alesina & Eliana La Ferrara, 2004. "Ethnic Diversity and Economic Performance," Development Working Papers 193, Centro Studi Luca d\'Agliano, University of Milano. [Downloadable!]
  3. Konrad, Kai A & Kovenock, Dan, 2008. "The Alliance Formation Puzzle and Capacity Constraints," CEPR Discussion Papers 6741, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Stergios Skaperdas, 2007. "An Economic Approach to Analyzing Civil War," Working Papers 060715, University of California-Irvine, Department of Economics. [Downloadable!]
    Other versions:
  5. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November. [Downloadable!] (restricted)
  6. Johannes Münster, 2007. "Simultaneous inter- and intra-group conflicts," Economic Theory, Springer, vol. 32(2), pages 333-352, August. [Downloadable!] (restricted)
  7. Dutta, Indranil & Mishra, Ajit, 2005. "Does Inequality lead to Conflict?," Working Papers RP2005/34, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  8. Johannes Münster, 2004. "Simultaneous inter- and intra-group conflicts," Discussion Papers 4, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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