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On the Social Efficiency of Conflict

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Abstract

In sharp contrast with the economic literature on conflict, this paper shows that confrontation may be efficiency enhancing. Conditions are derived under which a contest over the exclusive control of a resource Pareto dominates open access. When the population size is big enough or production exhibits strong decreasing returns to scale, agents unanimously prefer to engage in conflict.

Suggested Citation

  • Santiago Sanchez-Pages, 2005. "On the Social Efficiency of Conflict," ESE Discussion Papers 97, Edinburgh School of Economics, University of Edinburgh.
  • Handle: RePEc:edn:esedps:97
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    References listed on IDEAS

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    1. Muthoo, Abhinay, 2004. "A model of the origins of basic property rights," Games and Economic Behavior, Elsevier, vol. 49(2), pages 288-312, November.
    2. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
    3. Cornes, Richard & Sandler, Todd, 1983. "On Commons and Tragedies," American Economic Review, American Economic Association, vol. 73(4), pages 787-792, September.
    4. Bush, Winston C. & Mayer, Lawrence S., 1974. "Some implications of anarchy for the distribution of property," Journal of Economic Theory, Elsevier, vol. 8(4), pages 401-412, August.
    5. Neary, Hugh M, 1997. "Equilibrium Structure in an Economic Model of Conflict," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 480-494, July.
    6. 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.
    7. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
    8. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
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    Cited by:

    1. Beviá, Carmen & Corchón, Luis C., 2010. "Peace agreements without commitment," Games and Economic Behavior, Elsevier, pages 469-487.
    2. Markwardt, Gunther & Farzanegan, Mohammad & Leßmann, Christian, 2013. "Natural-resource rents and internal conflicts - Can decentralization lift the curse?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79940, Verein für Socialpolitik / German Economic Association.
    3. Janus, Thorsten, 2012. "Natural resource extraction and civil conflict," Journal of Development Economics, Elsevier, vol. 97(1), pages 24-31.
    4. Santiago Sánchez-Pagés, 2007. "Endogenous coalition formation in contests," Review of Economic Design, Springer;Society for Economic Design, vol. 11(2), pages 139-163, September.
    5. Luis Corchón, 2007. "The theory of contests: a survey," Review of Economic Design, Springer;Society for Economic Design, pages 69-100.

    More about this item

    Keywords

    commons; exclusion contest; open-access resource;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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