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Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes, (The Good-Cop and the Bad-Cop Game)

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  • Caruso Raul

    (Università Cattolica del Sacro Cuore di Milano – Institute of Economic Policy)

Abstract

This paper considers a partial equilibrium model of conflict where two asymmetric, rational and risk-neutral opponents clash in order to redistribute a divisible prize in their favour. 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 a complex bundle of Conflict Management Procedures (CMPs). Through comparative statics, different scenarios are studied. A Potential Settlement Region (PSR) is presented as the set of all possible settlement points. First, the role of asymmetry in the evaluation of the contested stake has been underlined. The agent with the lower evaluation will expend efforts in conflict management only when the asymmetry is extremely large. When agents are asymmetrical both in evaluation of the stake and in fighting abilities, there is also a smaller PSR. Once the destruction parameter is considered, agents clearly also take into account the opportunity cost of the conflict and enlarge a PSR. Finally, throughout the paper, the concept of entropy has been applied as a tentative tool for the measurement and evaluation of conflict and conflict management.

Suggested Citation

  • Caruso Raul, 2006. "Conflict and Conflict Management with Interdependent Instruments and Asymmetric Stakes, (The Good-Cop and the Bad-Cop Game)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 12(1), pages 1-55, September.
  • Handle: RePEc:bpj:pepspp:v:12:y:2006:i:1:n:1
    DOI: 10.2202/1554-8597.1091
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    Cited by:

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    4. Münster, Johannes, 2008. "Group contest success functions [Group Contest Success Functions]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-20, WZB Berlin Social Science Center.
    5. Raul Caruso, 2008. "Il calcio tra mercato, relazioni e coercizione," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(1), pages 71-88, Aprile.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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