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Cooperation and Distributive Conflict

Listed author(s):
  • Ralph-C Bayer

    ()

    (School of Economics, University of Adelaide)

If either property rights or institutions are weak, agents who create wealth by cooperating will later have an incentive to fight over the distribution of it. In this paper we investigate theoretically and experimentally the circumstances under which welfare losses from investment in distributional contests destroy welfare gains from voluntary cooperation. We find that in situations, where the return to cooperation is high, subjects cooperate strongly and welfare exceeds the predicted non-cooperation levels. If returns to cooperation are low, then subjects still cooperate, but the resources wasted in the distributional conflict lead to lower welfare than if subjects had followed the theoretical prediction of not cooperating.

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File URL: https://economics.adelaide.edu.au/research/papers/doc/wp2015-04.pdf
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Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 2015-04.

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Length: 40 pages
Date of creation: Jan 2015
Handle: RePEc:adl:wpaper:2015-04
Contact details of provider: Postal:
Adelaide SA 5005

Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/

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  13. Chowdhury, Subhasish M. & Sheremeta, Roman M. & Turocy, Theodore L., 2014. "Overbidding and overspreading in rent-seeking experiments: Cost structure and prize allocation rules," Games and Economic Behavior, Elsevier, vol. 87(C), pages 224-238.
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