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When does universal peace prevail? Secession and group formation in rent seeking contests and policy conflD72icts


  • Francis Bloch
  • Santiago S?chez-Pag?


  • Raphael Soubeyran


This paper analyzes secession and group formation in a general model of contest inspired by Esteban and Ray (1999). This model encompasses as special cases rent seeking contests and policy conflicts, where agents lobby over the choice of a policy in a one-dimensional policy space. We show that in both models the grand coalition is the efficient coalition structure and agents are always better off in the grand coalition than in a symmetric coalition structure. Individual agents (in the rent seeking contest) and extremists (in the policy conflict) only have an incentive to secede when they anticipate that their secession will not be followed by additional secessions. Incentives to secede are lower when agents cooperate inside groups. The grand coalition emerges as the unique subgame perfect equilibrium outcome of a sequential game of coalition formation in rent seeking contests.

Suggested Citation

  • Francis Bloch & Santiago S?chez-Pag? & Raphael Soubeyran, "undated". "When does universal peace prevail? Secession and group formation in rent seeking contests and policy conflD72icts," UFAE and IAE Working Papers 543.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  • Handle: RePEc:aub:autbar:543.02

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    References listed on IDEAS

    1. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2006. "Efficiency Gains from Mergers," Chapters,in: European Merger Control, chapter 3 Edward Elgar Publishing.
    2. repec:hhs:iuiwop:543 is not listed on IDEAS
    3. Xavier Vives, 2002. "Private Information, Strategic Behavior, and Efficiency in Cournot Markets," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 361-376, Autumn.
    4. Stennek Johan, 2003. "Horizontal Mergers Without Synergies May Increase Consumer Welfare," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-14, January.
    5. Raith, Michael, 1996. "A General Model of Information Sharing in Oligopoly," Journal of Economic Theory, Elsevier, vol. 71(1), pages 260-288, October.
    6. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
    7. Satya P. Das & Sarbajit Sengupta, 2001. "Asymmetric Information, Bargaining, and International Mergers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(4), pages 565-590, December.
    8. Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-227, March.
    9. McAfee, R Preston & Williams, Michael A, 1992. "Horizontal Mergers and Antitrust Policy," Journal of Industrial Economics, Wiley Blackwell, vol. 40(2), pages 181-187, June.
    10. Carl Shapiro, 1986. "Exchange of Cost Information in Oligopoly," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 433-446.
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    Cited by:

    1. Garfinkel, Michelle R., 2004. "Stable alliance formation in distributional conflict," European Journal of Political Economy, Elsevier, vol. 20(4), pages 829-852, November.
    2. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
    3. Michelle R. Garfinkel, 2004. "On the Stability of Group Formation: Managing the Conflict Within," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(1), pages 43-68, February.

    More about this item


    secession; group formation; rent seeking contests; policy conflicts;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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