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The effect of within-group inequality in a conflict against a unitary threat

  • Maria Cubel

    ()

    (Universitat de Barcelona & IEB)

  • Santiago Sanchez-Pages

    ()

    (University of Barcelona & University of Edinburgh)

A group of agents must defend their individual income from an external threat by pooling their efforts against it. The winner of this confrontation is determined by a contest success function where members’ efforts may display different degrees of complementarity. Individual effort is costly and follows a convex isoelastic function. We investigate how the success of the group in the conflict and its members’ utilities vary with the degree of within-group inequality. We show that there is a natural relationship between the group’s probability of victory and the Atkinson index of inequality. If members’ efforts are complementary or the cost function convex enough, more egalitarianism within the group increases the likelihood of victory against the external threat. The opposite holds when members’ efforts are substitutes and the cost linear enough. Finally, we obtain conditions under which richer members of the group are willing to make transfers to poorer members in order to enhance their final payoff.

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Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2012/26.

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Length: 28 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:ieb:wpaper:2012/6/doc2012-26
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  1. Joan Mª Esteban & Debraj Ray, 2005. "A Model of Ethnic Conflict," Working Papers 253, Barcelona Graduate School of Economics.
  2. Carmen Beviá & Luis C. Corchón, 2008. "Peace Agreements Without Commitment," Working Papers 340, Barcelona Graduate School of Economics.
  3. Kolm, Serge-Christophe, 1976. "Unequal inequalities. II," Journal of Economic Theory, Elsevier, vol. 13(1), pages 82-111, August.
  4. Debraj Ray & Jean-Marie Baland & Olivier Dagnelie, 2007. "Inequality and Inefficiency in Joint Projects," Post-Print halshs-00160753, HAL.
  5. Cornes, Richard, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 259-71, February.
  6. Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, vol. 3(3), pages 177-200, November.
  7. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
  8. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  9. Jack Hirshleifer, 1983. "From weakest-link to best-shot: The voluntary provision of public goods," Public Choice, Springer, vol. 41(3), pages 371-386, January.
  10. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November.
  11. Sekeris Petros, 2011. "Land Inequality and Conflict in Sub-Saharan Africa," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-18, January.
  12. repec:cup:cbooks:9780521477185 is not listed on IDEAS
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