Conflict and Uncertainty: A Dynamic Approach
Most of the conflict theory papers have used a one-shot game set-up. This does not correspond to reality and is certainly incapable of modeling real conflict situations. We propose a dynamic model with N-agents in an infinite time frame which allow us to adequately analyze conflicts. The dynamic aspects of the conflict come at least from two sources: first, the preferences on the good in dispute are not static; second, agentsin conflict can influence the future of the conflict by making investment in conflict's technology. We use a simple deterministic rule that defines the evolution of the subjective valuation for the good in dispute according to the results obtained by the agents in the recent past. During each period the realization of stochastic variables of the nature's states induces uncertainty in the game. The model is a theoretical approach that can be applied to evaluate the role of uncertainty and valuations' evolution on the optimal choices of forward-looking economic agents that seek to appropriate a share of a divisible resource.
|Date of creation:||21 Jan 2010|
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- Anderton, Charles H & Anderton, Roxane A & Carter, John R, 1999. "Economic Activity in the Shadow of Conflict," Economic Inquiry, Western Economic Association International, vol. 37(1), pages 166-179, January.
- Schmitt-Grohe, Stephanie & Uribe, Martin, 2004.
"Solving dynamic general equilibrium models using a second-order approximation to the policy function,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 28(4), pages 755-775, January.
- Stephanie Schmitt-Grohe & Martin Uribe, 2001. "Solving Dynamic General Equilibrium Models Using a Second-Order Approximation to the Policy Function," Departmental Working Papers 200106, Rutgers University, Department of Economics.
- Schmitt-Grohé, Stephanie & Uribe, Martín, 2001. "Solving Dynamic General Equilibrium Models Using a Second-Order Approximation to the Policy Function," CEPR Discussion Papers 2963, C.E.P.R. Discussion Papers.
- Stephanie Schmitt-Grohe & Martin Uribe, 2002. "Solving Dynamic General Equilibrium Models Using a Second-Order Approximation to the Policy Function," NBER Technical Working Papers 0282, National Bureau of Economic Research, Inc.
- Rafael Reuveny & John W. Maxwell, "undated". "Conflict and Renewable Resources," Working Papers 2004-26, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-1288, December.
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