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Continuing Conflict

Author

Listed:
  • John W. Maxwell

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

  • Rafael Reuveny

    (School of Public and Environmental Affairs, Indiana University)

Abstract

A relatively small but growing literature in economics examines conflictive activities where agents allocate their resource endowments between wealth production and appropriation. To date, their studies have employed a one period, static game theoretic framework. We propose a methodology to extend this literature to a dynamic setting, modeling continuous conflict over renewable natural resources between two rival groups. Investigating the system’s steady states and dynamics, we find two results of general interest. First, Hirshleifer’s “paradox of power” is self-correcting. Second, if productive activities cause damage to disputed resources, the introduction of a small amount of conflictive activity enhances social welfare.

Suggested Citation

  • John W. Maxwell & Rafael Reuveny, 2004. "Continuing Conflict," Working Papers 2004-27, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  • Handle: RePEc:iuk:wpaper:2004-27
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    References listed on IDEAS

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    2. Reuveny, Rafael & Maxwell, John W., 1998. "Free trade and arms races: Some thoughts regarding EU-Russian trade," ZEI Working Papers B 14-1998, University of Bonn, ZEI - Center for European Integration Studies.
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    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.
    9. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
    10. 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.
    11. 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.
    12. Durham, Yvonne & Hirshleifer, Jack & Smith, Vernon L., 2008. "The Paradox of Power," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 16, pages 127-137, Elsevier.
    13. Powell, Robert, 1993. "Guns, Butter, and Anarchy," American Political Science Review, Cambridge University Press, vol. 87(1), pages 115-132, March.
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    Citations

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    Cited by:

    1. David Croix & Davide Dottori, 2008. "Easter Island’s collapse: a tale of a population race," Journal of Economic Growth, Springer, vol. 13(1), pages 27-55, March.
    2. Adam Jacobsson, 2009. "War and peace—cyclical phenomena?," Public Choice, Springer, vol. 141(3), pages 467-480, December.
    3. Chan, Kenneth S. & Laffargue, Jean-Pierre, 2016. "Plunder and tribute in a Malthusian world," Mathematical Social Sciences, Elsevier, vol. 84(C), pages 138-150.
    4. van der Ploeg, Frederick & Rohner, Dominic, 2012. "War and natural resource exploitation," European Economic Review, Elsevier, vol. 56(8), pages 1714-1729.
    5. Dripto Bakshi & Indraneel Dasgupta, 2018. "A model of dynamic conflict in ethnocracies," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(2), pages 147-170, February.
    6. Matthew Baker & Erwin Bulte, 2010. "Kings and Vikings: on the dynamics of competitive agglomeration," Economics of Governance, Springer, vol. 11(3), pages 207-227, June.
    7. Anderton, Charles H. & Carter, John R., 2008. "Vulnerable trade: The dark side of an Edgeworth box," Journal of Economic Behavior & Organization, Elsevier, vol. 68(2), pages 422-432, November.
    8. Eggert, Wolfgang & Itaya, Jun-ichi & Mino, Kazuo, 2011. "A dynamic model of conflict and appropriation," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1), pages 167-182.
    9. Reuveny, Rafael & Maxwell, John W. & Davis, Jefferson, 2011. "On conflict over natural resources," Ecological Economics, Elsevier, vol. 70(4), pages 698-712, February.
    10. Hausken, Kjell, 2008. "Whether to attack a terrorist's resource stock today or tomorrow," Games and Economic Behavior, Elsevier, vol. 64(2), pages 548-564, November.
    11. Bharat Goel & Arijit Sen, 2019. "Appropriative Conflicts and the Evolution of Property Rights," Working Papers tax-mpg-rps-2019-06, Max Planck Institute for Tax Law and Public Finance.
    12. John W. Maxwell & Rafael Reuveny & Jefferson Davis, 2007. "Dynamic Winner-take-all Conflict," Working Papers 2007-12, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    13. Rafael Reuveny & John W. Maxwell & Jefferson Davis, 2011. "Dynamic Winner-Take-All Conflict," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(5), pages 471-492, August.
    14. Alex Coram, 2006. "An asymmetric dynamic struggle between pirates and producers," UMASS Amherst Economics Working Papers 2006-07, University of Massachusetts Amherst, Department of Economics.

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    More about this item

    Keywords

    Conflict; Dynamics; Paradox of Power; Renewable Resources;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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