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A Tentative Model of Conflict, Appropriation and Production in a two-sector Economy

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  • Caruso, Raul

Abstract

This paper presents a model of conflict in an economy characterized by two sectors. In a first sector labelled as contested sector two agents struggle in order to appropriate the maximum possible fraction of a contestable output. In a second sector, the uncontested sector, each agent holds secure property rights over the production of some goods. Both agents maximize an income function which can be described as a function of contributions of both sectors. Results show that the degree of returns in the uncontested sector is a powerful force which countervails the impact of destructive and unproductive interaction in the contested sector.

Suggested Citation

  • Caruso, Raul, 2007. "A Tentative Model of Conflict, Appropriation and Production in a two-sector Economy," MPRA Paper 4053, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4053
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    References listed on IDEAS

    as
    1. Raul Caruso, 2004. "A Trade Institution as a Peaceful Institution?," Others 0406003, University Library of Munich, Germany, revised 02 May 2005.
    2. Kjell Hausken, 2004. "Mutual Raiding of Production and the Emergence of Exchange," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 572-586, October.
    3. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-1288, December.
    4. Raul Caruso, 2007. "Continuing Conflict and Stalemate: A note," Economics Bulletin, AccessEcon, vol. 4(17), pages 1-8.
    5. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 2, chapter 22, pages 649-709, Elsevier.
    6. Enrico Spolaore, 2004. "Economic Integration, International Conflict and Political Unions," Rivista di Politica Economica, SIPI Spa, vol. 94(5), pages 3-50, September.
    7. Raul Caruso, 2008. "Reciprocity in the shadow of threat," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 55(1), pages 91-111, April.
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    Cited by:

    1. Caruso Raul, 2011. "On the Nature of Peace Economics," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-13, January.
    2. Raul Caruso, 2009. "Spesa pubblica e criminalità organizzata in Italia: evidenza empirica su dati Panel nel periodo 1997-2003," Economia & lavoro, Carocci editore, issue 1, pages 1-73.
    3. McDougal Topher L, 2009. "The Liberian State of Emergency: What Do Civil War and State-Led Industrialization Have in Common?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 14(3), pages 1-28, March.
    4. MacDougal, L. Topher, 2010. "How Production Firms Adapt to War: e Case of Liberia," WIDER Working Paper Series 069, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

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    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

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