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Social decision rules are not immune to conflict

Author

Listed:
  • Joan Esteban
  • Debraj Ray

Abstract

Why is rent-seeking so endemic in societies? Might it not be possible to design a Pareto-improving social decision rule that sidesteps the inefficient waste of resources resulting from conflict? We study this question for a multi-player contest. We assume that a benevolent planner knows the winning payoffs, the effectiveness of each rent-seeker, that the cost of expending resources is isoelastic, and that it is the same across all players. But she does not know the precise value of this elasticity. We show that this minimal lack of information leads to the impossibility of a Pareto-improving social decision rule, as long as there are at least four agents. Copyright Springer-Verlag Berlin Heidelberg 2001

Suggested Citation

  • Joan Esteban & Debraj Ray, 2001. "Social decision rules are not immune to conflict," Economics of Governance, Springer, vol. 2(1), pages 59-67, March.
    • Handle: RePEc:spr:ecogov:v:2:y:2001:i:1:p:59-67
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    Cited by:

    1. Moti Michaeli & Daniel Spiro, "undated". "The dynamics of revolutions," Working Papers WP2017/8, University of Haifa, Department of Economics.
    2. Coyne,Christopher J., 2020. "Defense, Peace, and War Economics," Cambridge Books, Cambridge University Press, number 9781108724036, October.
    3. Max Gallop, 2017. "More dangerous than dyads: how a third party enables rationalist explanations for war," Journal of Theoretical Politics, , vol. 29(3), pages 353-381, July.
    4. Maria Cubel, 2010. "Fiscal equalization and political conflict," Working Papers 2010/9, Institut d'Economia de Barcelona (IEB).
    5. Herschel I. Grossman, 2004. "Constitution or Conflict?," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(1), pages 29-42, February.
    6. Herschel Grossman, 2003. "Distributional Disputes and Civil Conflict," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 40(121), pages 608-616.
    7. Boosey, Luke & Brookins, Philip & Ryvkin, Dmitry, 2019. "Contests between groups of unknown size," Games and Economic Behavior, Elsevier, vol. 113(C), pages 756-769.
    8. Joan Esteban & Debraj Ray, 2008. "Polarization, Fractionalization and Conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 45(2), pages 163-182, March.
    9. Reynal-Querol, Marta, 2005. "Does democracy preempt civil wars?," European Journal of Political Economy, Elsevier, vol. 21(2), pages 445-465, June.
    10. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
    11. Dmitry Ryvkin & Andreas Ortmann, 2008. "The Predictive Power of Three Prominent Tournament Formats," Management Science, INFORMS, vol. 54(3), pages 492-504, March.
    12. Bel, Germà, 2004. "Estado ¿versus? Mercado/State ¿Versus? Market," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 22, pages 231-249, Agosto.
    13. James W. Boudreau & Lucas Rentschler & Shane Sanders, 2019. "Stag hunt contests and alliance formation," Public Choice, Springer, vol. 179(3), pages 267-285, June.
    14. Maria Cubel, 2010. "Fiscal equalization and political conflict," Working Papers 2010/9, Institut d'Economia de Barcelona (IEB).
    15. Herschel I. Grossman, 2003. "Distributional Disputes and Civil Conflict," Working Papers 2003-14, Brown University, Department of Economics.
    16. Marta Reynal-Querol, 2002. "Political systems, stability and civil wars," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(6), pages 465-483.

    More about this item

    Keywords

    Key words: conflict; social decision rule; incomplete information; JEL classification: D74; D80;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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