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Interest in Private Assets and the Voracity Effect

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  • Yohei Tenryu

    (Graduate School of Economics, Kyoto University)

Abstract

Using a differential game, we analyze a multiple agent economy in which there are common and private capital stocks. Each interest group can access the common capital and its own private capital stocks but not anyone else's private capital stocks. Considering the situation in which each interest group can observe and has interest in the opponents' private capital stocks, we show the following. The capital stocks have a negative effect on the consumption of each agent. The growth rate of the common capital does not depend on the technology level of the common sector; that is there is no voracity effect. Each agent's welfare is always lower than it is in the case that each agent has no interest in the opponents' private capital stocks.

Suggested Citation

  • Yohei Tenryu, 2013. "Interest in Private Assets and the Voracity Effect," KIER Working Papers 850, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:850
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP850.pdf
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    References listed on IDEAS

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    1. Tornell, Aaron, 1999. "Voracity and growth in discrete time," Economics Letters, Elsevier, vol. 62(1), pages 139-145, January.
    2. Reynolds, Stanley S., 1991. "Dynamic oligopoly with capacity adjustment costs," Journal of Economic Dynamics and Control, Elsevier, vol. 15(3), pages 491-514, July.
    3. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-1231, December.
    4. Strulik, Holger, 2012. "Poverty, voracity, and growth," Journal of Development Economics, Elsevier, vol. 97(2), pages 396-403.
    5. Ngo Long & Gerhard Sorger, 2006. "Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(3), pages 513-529, August.
    6. Akihisa Shibata, 2002. "Strategic Interactions in a Growth Model with Infrastructure Capital," Metroeconomica, Wiley Blackwell, vol. 53(4), pages 434-460, November.
    7. Mino, Kazuo, 2006. "Voracity vs. scale effect in a growing economy without secure property rights," Economics Letters, Elsevier, vol. 93(2), pages 278-284, November.
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    Cited by:

    1. Tenryu, Yohei, 2013. "The Role of the Private Sector under Insecure Property Rights," MPRA Paper 50727, University Library of Munich, Germany.

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    More about this item

    Keywords

    differential game; Markov-perfect equilibrium; the voracity effect;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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