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Between-Group Contests over Group-Specific Public Goods with Within-Group Fragmentation

Listed author(s):
  • Dasgupta, Indraneel

    ()

    (Indian Statistical Institute)

  • Neogi, Ranajoy Guha

    (Indian Statistical Institute)

We model a contest between two groups of equal population size over the division of a group-specific public good. Each group is fragmented into sub-groups. Each sub-group allocates effort between production and contestation. There is perfect coordination within sub-groups, but sub-groups cannot coordinate with one another. All sub-groups choose effort allocations simultaneously. We find that aggregate rent-seeking rises, social welfare falls, and both communities are worse off when the dominant sub-groups within both communities increase their population shares relative to the respective average sub-group population. Any unilateral increase in fragmentation within a group reduces conflict and makes its opponent better off. The fragmenting community itself may however be better off as well, even though its share of the public good falls. Thus, a reduced share of public good provisioning cannot be used to infer a negative welfare implication for the losing community.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10881.

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Length: 21 pages
Date of creation: Jul 2017
Handle: RePEc:iza:izadps:dp10881
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  1. Heinrich W. Ursprung, 1990. "Public Goods, Rent Dissipation, And Candidate Competition," Economics and Politics, Wiley Blackwell, vol. 2(2), pages 115-132, 07.
  2. Dasgupta, Indraneel, 2009. "'Living' wage, class conflict and ethnic strife," Journal of Economic Behavior & Organization, Elsevier, vol. 72(2), pages 750-765, November.
  3. Chowdhury, Subhasish M. & Lee, Dongryul & Sheremeta, Roman M., 2013. "Top guns may not fire: Best-shot group contests with group-specific public good prizes," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 94-103.
  4. Cheikbossian, Guillaume, 2008. "Heterogeneous groups and rent-seeking for public goods," European Journal of Political Economy, Elsevier, vol. 24(1), pages 133-150, March.
  5. Indraneel Dasgupta & Ravi Kanbur, 2005. "Community and anti-poverty targeting," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 3(3), pages 281-302, December.
  6. Kjell Hausken, 2005. "Production and Conflict Models Versus Rent-Seeking Models," Public Choice, Springer, vol. 123(1), pages 59-93, April.
  7. Kolmar, Martin & Rommeswinkel, Hendrik, 2013. "Contests with group-specific public goods and complementarities in efforts," Journal of Economic Behavior & Organization, Elsevier, vol. 89(C), pages 9-22.
  8. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
  9. Kyung Baik, 2008. "Contests with group-specific public-good prizes," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 30(1), pages 103-117, January.
  10. Dasgupta, Indraneel & Kanbur, Ravi, 2007. "Community and class antagonism," Journal of Public Economics, Elsevier, vol. 91(9), pages 1816-1842, September.
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  12. Katz, Eliakim & Nitzan, Shmuel & Rosenberg, Jacob, 1990. "Rent-Seeking for Pure Public Goods," Public Choice, Springer, vol. 65(1), pages 49-60, April.
  13. Gil S. Epstein & Yosef Mealem, 2009. "Group Specific Public Goods, Orchestration of Interest Groups and Free Riding," Working Papers 2009-02, Bar-Ilan University, Department of Economics.
  14. Gil Epstein & Yosef Mealem, 2009. "Group specific public goods, orchestration of interest groups with free riding," Public Choice, Springer, vol. 139(3), pages 357-369, June.
  15. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
  16. Lee, Dongryul, 2012. "Weakest-link contests with group-specific public good prizes," European Journal of Political Economy, Elsevier, vol. 28(2), pages 238-248.
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