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Savings and Predation

Author

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  • Sylvain Chassang
  • Gerard Padró i Miquel

Abstract

We contrast the relationship between predation and the savings of its potential victim in two different simple models. In the first model, predation is an exogenous event in which savings are expropriated with some fixed probability. In such a setting, the higher the probability of expropriation the lower are savings. In the second model, we endow the predatory agent with a decision whether to expropriate or to devote his efforts to some productive endeavor. In this second model, the (endogenous) probability of expropriation can easily be positively correlated with savings. In addition, we show that predation is more damaging to the savings and utility of the victim in the second model. (JEL: D91, D74) (c) 2010 by the European Economic Association.

Suggested Citation

  • Sylvain Chassang & Gerard Padró i Miquel, 2010. "Savings and Predation," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 645-654, 04-05.
  • Handle: RePEc:tpr:jeurec:v:8:y:2010:i:2-3:p:645-654
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    Cited by:

    1. Carlos Bethencourt & Fernando Perera-Tallo, 2011. "Predation, Labor Share and Development," DEGIT Conference Papers c016_039, DEGIT, Dynamics, Economic Growth, and International Trade.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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