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A Dynamic Model of Conflict and Cooperation

Author

Listed:
  • Wolfgang Eggert

    () (University of Paderborn)

  • Jun-ichi Itaya

    () (Graduate School of Economics and Business Admministration and CESifo, Hokkaido University)

  • Kazuo Mino

    () (Graduate School of Economics, Osaka University)

Abstract

We introduce a common-pool contest into a continuous-time, differential game setting to model the dynamic behavior of agents facing a trade-off between socially productive activities and appropriation. We are able to identify multiple Markov perfect equilibrium strategies that are nonlinear in a state space, thus leading the economy to a state where epartial cooperation f occurs. We show that such cooperation can be seen as a response to conflict. We also discuss the consequences of changes in the effectiveness of appropriation, the number of contenders, and the rate of time preferences on contest equilibria.

Suggested Citation

  • Wolfgang Eggert & Jun-ichi Itaya & Kazuo Mino, 2008. "A Dynamic Model of Conflict and Cooperation," Discussion Papers in Economics and Business 08-27, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  • Handle: RePEc:osk:wpaper:0827
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0827.pdf
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    Cited by:

    1. Konrad, Kai A., 2007. "Strategy in contests: an introduction
      [Strategie in Turnieren – eine Einführung]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).

    More about this item

    Keywords

    Conflict; Cooperation; Differential Game; Markov Perfect Equilibrium; Nonlinear Markov strategy;

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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