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, 167-182

Abstract: This paper presents an extension of a static model of economic conflict analyzed by Hirshleifer (1991, 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)
JEL-codes: D74 L11 (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:p:167-182

DOI: 10.1016/j.jebo.2011.01.003

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