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Aggressiveness and Redistribution

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  • Bös, Dieter
  • Kolmar, Martin

Abstract

In this paper we deal with voluntary and compulsory redistribution in an economy where the enforcement of property rights is costly. Two agents engage in a common-pool contest and two types of potential distortions arise: the waste of resources in the contest and the dilution of incentives to produce as a result of the existens of externalities in the conflict equilibrium. We were able to show the following results: (i) In some situations Pareto-improving redistribution occurs voluntarily. (ii) Otherwise, the government may choose an indirect way to improve production in the presence of appropriation: In a situation of partial anarchy in some market redistributive policies in other markets may help to reduce the inefficiency in the anarchic market.

Suggested Citation

  • Bös, Dieter & Kolmar, Martin, 2003. "Aggressiveness and Redistribution," Bonn Econ Discussion Papers 2/2003, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:22003
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    References listed on IDEAS

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    More about this item

    Keywords

    Anarchy; Contests; Redistribution;
    All these keywords.

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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