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The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game

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  • Cheikbossian, Guillaume

Abstract

This paper analyzes the ability of group members to cooperate in rent-seeking activities in a context of between-group competition. For this purpose, we develop an infinitely repeated rent-seeking game between two groups of different size. We first investigate Nash reversion strategies to support cooperative behavior in both groups, before analyzing double-edge trigger strategies which support cooperation in one group only. These last strategies have the property that cheating on the agreement in the cooperative group is followed by non-cooperation in this group and cooperation in the rival group. The main conclusion is that the set of parameters for which cooperation can be sustained within the larger group as a subgame perfect outcome is as large as that for which cooperation can be sustained in the smaller group. Hence, in contrast to Olsonʼs (1965) celebrated thesis, but in accordance with many informal and formal observations, larger groups can be as effective as smaller groups in furthering their interests.

Suggested Citation

  • Cheikbossian, Guillaume, 2012. "The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game," Games and Economic Behavior, Elsevier, vol. 74(1), pages 68-82.
  • Handle: RePEc:eee:gamebe:v:74:y:2012:i:1:p:68-82
    DOI: 10.1016/j.geb.2011.05.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Paul Pecorino, 2016. "Individual welfare and the group size paradox," Public Choice, Springer, vol. 168(1), pages 137-152, July.
    2. James Lake & Maia K. Linask, 2013. "The near-equivalence of tariffs and quotas," Departmental Working Papers 1305, Southern Methodist University, Department of Economics.
    3. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    4. James Lake & Maia Linask, 2015. "Costly distribution and the non-equivalence of tariffs and quotas," Public Choice, Springer, vol. 165(3), pages 211-238, December.
    5. Cheikbossian, Guillaume, 2012. "The collective action problem: Within-group cooperation and between-group competition in a repeated rent-seeking game," Games and Economic Behavior, Elsevier, vol. 74(1), pages 68-82.
    6. repec:ebl:ecbull:eb-18-00011 is not listed on IDEAS
    7. Boudreau, James W. & Sanders, Shane & Shunda, Nicholas, 2017. "The Role of Noise in Alliance Formation and Collusion in Conflicts," MPRA Paper 81533, University Library of Munich, Germany.
    8. Nicolas Querou, 2018. "Interacting collective action problems in the commons," CEE-M Working Papers 18-04, CEE-M, Universitiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    9. Boudreau, James W. & Shunda, Nicholas, 2015. "Tacit Collusion in Repeated Contests with Noise," MPRA Paper 65671, University Library of Munich, Germany.

    More about this item

    Keywords

    Collective action; Rent-seeking; Within-group cooperation; Between-group competition; Repeated game;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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