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Trust, Primary Commodity Dependence and Segregation

Author

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  • A. SCHOLLAERT
  • D. VAN DE GAER

Abstract

Many third world countries seem to fail to create a growth-promoting and peaceful institutional framework and are plagued by ethnic, religious or social conflict. This paper focuses on the impact of primary commodities on group behavior and, thus, on the nature of the resulting societies. Strategies are analyzed in a basic one-shot game with two players and two strategies, in which priors vis-a-vis the other player matter. We show that poverty, foreign interference and trust influence a group's willingness to cooperate. Under some circumstances (partial) segregation and (political) strife prove to be utility-maximizing and equilibrium strategies.

Suggested Citation

  • A. Schollaert & D. Van De Gaer, 2003. "Trust, Primary Commodity Dependence and Segregation," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/190, Ghent University, Faculty of Economics and Business Administration.
    • Handle: RePEc:rug:rugwps:03/190
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    File URL: http://wps-feb.ugent.be/Papers/wp_03_190.pdf
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    References listed on IDEAS

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    1. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1243-1284.
    2. Andre, Catherine & Platteau, Jean-Philippe, 1998. "Land relations under unbearable stress: Rwanda caught in the Malthusian trap," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 1-47, January.
    3. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May.
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    Cited by:

    1. D. Van den Poel, 2003. "Predicting Mail-Order Repeat Buying. Which Variables Matter?," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(3), pages 371-404.
    2. Arne Schollaert & Dirk Van de gaer, 2008. "Boycotts, Power Politics, or Trust Building: How to Prevent Conflict?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(2), pages 356-379, June.

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    More about this item

    Keywords

    Non Cooperative Games; Natural Resources; Trust.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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