In order to analyze conflict and cooperation between a State and a non ruling group in a general equilibrium, I unite pure rent-seeking models and economic models of conflict under an assumption of incomplete property rights. I show that a unique and globally stable Nash equilibrium exists in this game. Cooperation breakdowns appear to be twofold: generalized conflict driven by a collapse of the State and one- sided rebellion due to the coexistence between a strong State and a weak minority. Natural resources increase the conflict intensity but raise also the cost of rebellion for the ruler inducing this one to be more benevolent toward his minority.
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Paper provided by EconWPA in its series Public Economics with number
0506006.
Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games D30 - Microeconomics - - Distribution - - - General H10 - Public Economics - - Structure and Scope of Government - - - General
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