A dynamic model of conflict and appropriation

Wolfgang Eggert, Jun-ichi Itaya () and Kazuo Mino

Journal of Economic Behavior & Organization, 2011, vol. 78, issue 1-2, 167-182

Abstract: Abstract This paper presents an extension of a static model of economic conflict analyzed by (Hirshleifer, 1991) and (Hirshleifer, 1995) and Skaperdas (1992) to an infinite horizon differential game. Our aim is to highlight the strategic role of appropriation among a smaller group of agents in an intertemporal context. The model yields the conclusion that there exists a unique linear/nonlinear Markov perfect equilibrium strategy, even when strategies are defined over the entire state space. We demonstrate that "partial cooperation" can be seen as a long-run response to conflict. Moreover, a decrease in the effectiveness of appropriation, the depreciation rate of a common-pool stock, the rate of time preferences or an increase in the "degree of noise" improves the degree of "partial cooperation" and thus welfare in an anarchic society.

Keywords: Conflict; Cooperation; Differential; game; Markov; perfect; equilibrium; Nonlinear; Markov; strategy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Journal Article: A dynamic model of conflict and appropriation (2011)
Working Paper: A DynamicModel of Conflict and Appropriation (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:78:y:2011:i:1-2:p:167-182

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