Production and Conflict Models Versus Rent-Seeking Models
A production and conflict (P&C) model and a rent-seeking (RS) model are compared for one group, two groups and K groups. Adding a new agent enlarges the pie in the P&C model, but causes the fixed size pie to be allocated on one more rent seeker in the RS model. The total production or rent is distributed within and between groups according to the within-group and between-group decisiveness. Productive and fighting efficiencies and group sizes play a role. The collective action problem is more severe for the RS model. As group size increases, the ratio of within-group to between-group fighting increases marginally toward a constant for the P&C model, while it increases convexly for the RS model. Adding an additional agent to each of two groups is more detrimental to the utilities in RS groups than in P&C groups, while adding a second group of agents when there is already one group of agents gives the reverse result. The severe between-group fighting in the P&C model for many groups causes the P&C model to be preferable for few groups, while the RS model is preferable for many groups. Applications are considered to intergroup migration, inside versus outside ownership, divestitures, mergers and acquisitions, multidivisional versus single-tier firms and U form versus M form of economic organization. Copyright Springer Science + Business Media, Inc. 2005
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Michelle R. Garfinkel, 2003.
"Stable Alliance Formation in Distributional Conflict,"
0305001, EconWPA, revised 16 Jun 2003.
- Garfinkel, Michelle R., 2004. "Stable alliance formation in distributional conflict," European Journal of Political Economy, Elsevier, vol. 20(4), pages 829-852, November.
- Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
- Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-94, July.
- Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
- Alfred D. Chandler, 1969. "Strategy and Structure: Chapters in the History of the American Industrial Enterprise," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530090, June.
- Cothren, Richard, 2000. "A Model of Plunder and Economic Growth," Journal of Macroeconomics, Elsevier, vol. 22(3), pages 385-407, July.
- Hausken, Kjell, 1995. "The dynamics of within-group and between-group interaction," Journal of Mathematical Economics, Elsevier, vol. 24(7), pages 655-687.
- Skaperdas, Stergios, 1996.
"Contest Success Functions,"
Springer, vol. 7(2), pages 283-90, February.
- Rafael Reuveny & John W. Maxwell, . "Conflict and Renewable Resources," Working Papers 2004-26, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Herschel Grossman, 2003.
"Fifty-four Forty or Fight,"
2003-10, Brown University, Department of Economics.
- Usher, D, 1987. "Theft as a Paradigm for Departures from Efficiency," Oxford Economic Papers, Oxford University Press, vol. 39(2), pages 235-52, June.
- Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
- Hausken, Kjell & Moxnes, John F., 2002. "Stochastic conditional and unconditional warfare," European Journal of Operational Research, Elsevier, vol. 140(1), pages 61-87, July.
- Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
- Nitzan, Shmuel, 1991. " Rent-Seeking with Non-identical Sharing Rules," Public Choice, Springer, vol. 71(1-2), pages 43-50, August.
- Hausken, Kjell, 2000. "Migration and intergroup conflict," Economics Letters, Elsevier, vol. 69(3), pages 327-331, December.
- Baik, Kyung Hwan & Shogren, Jason F, 1995. " Competitive-Share Group Formation in Rent-Seeking Contests," Public Choice, Springer, vol. 83(1-2), pages 113-26, April.
- D. Usher & M. Engineer, 1987. "The distribution of income in a despotic society," Public Choice, Springer, vol. 54(3), pages 261-276, August.
- Nitzan, Shmuel, 1994. "Modelling rent-seeking contests," European Journal of Political Economy, Elsevier, vol. 10(1), pages 41-60, May.
- Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. " Rent-Seeking for Pure Public Goods," Public Choice, Springer, vol. 65(1), pages 49-60, April.
- Herschel I. Grossman, 1998.
"Producers and Predators,"
98-6, Brown University, Department of Economics.
- Dan Usher & Merwan Engineer, 1986. "The Distribution of Income in a Despotic Society," Working Papers 653, Queen's University, Department of Economics.
- Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
- Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
- Skaperdas, Stergios & Syropoulos, Constantinos, 1997. "The Distribution of Income in the Presence of Appropriative Activities," Economica, London School of Economics and Political Science, vol. 64(253), pages 101-17, February.
- Wärneryd, Karl, 1997.
"Distributional Conflict and Jurisdictional Organization,"
SSE/EFI Working Paper Series in Economics and Finance
173, Stockholm School of Economics.
- Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
- Hausken, Kjell, 1998. "Collective rent seeking and division of labor1," European Journal of Political Economy, Elsevier, vol. 14(4), pages 739-768, November.
- Hausken, Kjell, 2000. "Cooperation and between-group competition," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 417-425, July.
- Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-79, January.
- Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:123:y:2005:i:1:p:59-93. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.