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Conflict and negotiation: a game theoretical approach

  • Hernando Zuleta

    ()

  • Juanita Villaveces

    ()

We study economic conflicts using a game theoretical approach. We model a conflict between twoagents where each one has two possible strategies: cease-fire or neglect the truce. Under thissetting, we use the concept of pre-donations, namely, a redefinition of the game where agentscommit to transfer a share of their output to the other agent (Sertel, 1992), and explain under whichconditions a system of pre-donations can facilitate a truce. We find that for conflicts involving highcosts there is a distributive mechanism, acceptable for both parties, such that, the best strategy forboth parties is Cease-Fire. However, in many cases there are no sufficient conditions for the schemeor pre-donations to be effective. We also analyze some limitations of this framework and extend themodel in order to deal with some of these flaws. Finally, in order to illustrate the relevance of thetheoretical results we briefly describe some of the circumstances that characterized the negotiationprocesses between the Colombian government and different illegal groups.

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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 005148.

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Length: 33
Date of creation: 02 Nov 2008
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Handle: RePEc:col:000092:005148
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  3. Barron, Patrick & Kaiser, Kai & Pradhan, Menno, 2004. "Local conflict in Indonesia : Measuring incidence and identifying patterns," Policy Research Working Paper Series 3384, The World Bank.
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  8. Sertel, Murat R., 1992. "The Nash bargaining solution manipulated by pre-donations is Talmudic," Economics Letters, Elsevier, vol. 40(1), pages 45-55, September.
  9. Hernando Zuleta & Veneta Andonova, 2006. "Conflict, wages, and multiple equilibria, a private path to prosperity," DOCUMENTOS DE TRABAJO 002181, UNIVERSIDAD DEL ROSARIO.
  10. Skaperdas, Stergios & Syropoulos, Constantinos, 1997. "The Distribution of Income in the Presence of Appropriative Activities," Economica, London School of Economics and Political Science, vol. 64(253), pages 101-17, February.
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  13. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-73, October.
  14. Alesina, Alberto, et al, 1996. " Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
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  17. Roubini, Nouriel & Swagel, Phillip & Ozler, Sule & Alesina, Alberto, 1996. "Political Instability and Economic Growth," Scholarly Articles 4553024, Harvard University Department of Economics.
  18. Roemer, John E., 1998. "Why the poor do not expropriate the rich: an old argument in new garb," Journal of Public Economics, Elsevier, vol. 70(3), pages 399-424, December.
  19. Charles H. Anderton, 2000. "An Insecure Economy under Ratio and Logistic Conflict Technologies," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 823-838, December.
  20. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004.
  21. Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-94, July.
  22. Veneta Andonova & Hernando Zuleta, 2007. "The effect of enforcement on human resources practices: A case study in rural Colombia," International Journal of Manpower, Emerald Group Publishing, vol. 28(1), pages 344 - 353, April.
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