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A dynamic model of conflict and appropriation

  • Eggert, Wolfgang
  • Itaya, Jun-ichi
  • Mino, Kazuo

Abstract This paper presents an extension of a static model of economic conflict analyzed by (Hirshleifer, 1991) and (Hirshleifer, 1995) and Skaperdas (1992) to an infinite horizon differential game. Our aim is to highlight the strategic role of appropriation among a smaller group of agents in an intertemporal context. The model yields the conclusion that there exists a unique linear/nonlinear Markov perfect equilibrium strategy, even when strategies are defined over the entire state space. We demonstrate that "partial cooperation" can be seen as a long-run response to conflict. Moreover, a decrease in the effectiveness of appropriation, the depreciation rate of a common-pool stock, the rate of time preferences or an increase in the "degree of noise" improves the degree of "partial cooperation" and thus welfare in an anarchic society.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 78 (2011)
Issue (Month): 1-2 (April)
Pages: 167-182

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Handle: RePEc:eee:jeborg:v:78:y:2011:i:1-2:p:167-182
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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  1. J. Amegashie, 2006. "A contest success function with a tractable noise parameter," Public Choice, Springer, vol. 126(1), pages 135-144, January.
  2. 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.
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  8. Gradstein, Mark, 2004. "Governance and growth," Journal of Development Economics, Elsevier, vol. 73(2), pages 505-518, April.
  9. Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, vol. 3(3), pages 177-200, November.
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