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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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    References listed on IDEAS

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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. 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.
    3. Maria Cubel, 2010. "Fiscal equalization and political conflict," Working Papers 2010/9, Institut d'Economia de Barcelona (IEB).
    4. Reynal-Querol, Marta, 2005. "Does democracy preempt civil wars?," European Journal of Political Economy, Elsevier, vol. 21(2), pages 445-465, June.
    5. Herschel I. Grossman, 2003. "Distributional Disputes and Civil Conflict," Working Papers 2003-14, Brown University, Department of Economics.
    6. Dmitry Ryvkin & Andreas Ortmann, 2008. "The Predictive Power of Three Prominent Tournament Formats," Management Science, INFORMS, pages 492-504.
    7. Bel, Germà, 2004. "Estado ¿versus? Mercado/State ¿Versus? Market," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 22, pages 231-249, Agosto.
    8. 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;

    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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