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A DynamicModel of Conflict and Appropriation

Author

Listed:
  • Wolfgang Eggert

    (University of Freiburg)

  • Jun-ichi Itaya

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

  • Kazuo Mino

    (Institute of Economic Research, Kyoto University)

Abstract

This paper conducts the analysis of conflict and appropriation by extending the static contest models such as Hirshleifer (1991, 1995) and Skaperdas (1992) to a continuoustime, differential game setting. This paper shows that there is a unique Markov perfect equilibrium (MPE) strategy, which may be linear or nonlinear depending on the structural parameters of the model, when strategies are defined over the entire state space. We show that 'partial cooperation' can be seen as a long-run response to conflict. In particular, we find that a decrease in the effectiveness of appropriation, the depreciation rate of a common-pool stock which is subject to appropriation or the rate of time preferences or an increase in the 'degree of noise' improves the degree of 'partial cooperation' and thus the welfare of an anarchic society in the long run.

Suggested Citation

  • Wolfgang Eggert & Jun-ichi Itaya & Kazuo Mino, 2010. "A DynamicModel of Conflict and Appropriation," KIER Working Papers 733, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:733
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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP733.pdf
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    Cited by:

    1. James W. Boudreau & Shane Sanders & Nicholas Shunda, 2019. "The role of noise in alliance formation and collusion in conflicts," Public Choice, Springer, vol. 179(3), pages 249-266, June.
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    3. Chris Tsoukis & Jun-ichi Itaya, 2019. "Distributive justice and social conflict in an AK model," CESifo Working Paper Series 7601, CESifo.
    4. Boudreau, James W. & Shunda, Nicholas, 2015. "Tacit Collusion in Repeated Contests with Noise," MPRA Paper 65671, University Library of Munich, Germany.

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    More about this item

    Keywords

    Conflict; Cooperation; Differential Game; Markov Perfect Equilibrium; Nonlinear Markov strategy;
    All these keywords.

    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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