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Extremism Drives Out Moderation

Author

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  • Bettina Klose

    (University of Zurich)

  • Dan Kovenock

    (Economic Science Institute, Chapman University)

Abstract

This article investigates the impact of the distribution of preferences on equilibrium behavior in conflicts that are modeled as all-pay auctions with identity-dependent externalities. In this context, we define centrists and radicals using a willingness-topay criterion that admits preferences more general than a simple ordering on the line. Through a series of examples, we show that substituting the auction contest success function for the lottery contest success function in a conflict may alter the relative expenditures of centrists and radicals in equilibrium. Extremism, characterized by a higher per capita expenditure by radicals than centrists, may persist and lead to a higher aggregate expenditure by radicals, even when they are relatively small in number. Moreover, we show that centrists may in the aggregate expend zero, even if they vastly outnumber radicals. Our results demonstrate the importance of the choice of the institutions of conflict, as modeled by the contest success function, in determining the role of extremism and moderation in economic, political, and social environments.

Suggested Citation

  • Bettina Klose & Dan Kovenock, 2012. "Extremism Drives Out Moderation," Working Papers 12-10, Chapman University, Economic Science Institute.
  • Handle: RePEc:chu:wpaper:12-10
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    References listed on IDEAS

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    Cited by:

    1. Bettina Klose & Dan Kovenock, 2015. "The all-pay auction with complete information and identity-dependent externalities," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(1), pages 1-19, May.
    2. Stefano Barbieri & David Malueg & Iryna Topolyan, 2014. "The best-shot all-pay (group) auction with complete information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 57(3), pages 603-640, November.
    3. Thomas Giebe & Paul Schweinzer, 2014. "All-pay-all aspects of political decision making," Public Choice, Springer, vol. 161(1), pages 73-90, October.

    More about this item

    Keywords

    Conflict; All-pay Auction; Identity-dependent Externalities; Radicalism; Extremism; Contest Success Function.;

    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
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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