Divide and Conquer: Noisy Communication in Networks, Power, and Wealth Distribution

Wilson Perez
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Wilson Perez: Department of Economics, Cornell University

No 2004.33, Working Papers from Fondazione Eni Enrico Mattei

Abstract: In a society composed of a ruler and its citizens: what are the determinants of the political equilibrium between these two? This paper approaches this problem as a game played between a ruler who has to decide the distribution of the aggregate income and a group of agents/citizens who have the opportunity to revolt if they are unhappy with the distribution. Nevertheless, if too few revolt, the agents become defeated and receive zero consumption, while a successful revolt increases the consumption level of the rebels whereas the ruler receives nothing. Coordinated action by citizens is possible because they form nodes in a communication network. However, communication through the network is noisy, which removes common knowledge about the endowments and could preclude the emergence of collective action among citizens. In this paper, I argue that the network structure and the noise level are determinants of the political equilibrium and wealth distribution. The model explains how the ruler could use propaganda, cooptation and repression to increase his expected utility. The formalization of the game is accomplished using such concepts as p-beliefs and p-dominant strategy (Monderer and Samet, 1989, and Morris and Shin, 2002). Finally, I illustrate the model by applying it to cases in Nigeria and Zaire/Congo.

Keywords: Non cooperative Games; Networks; Political economy; Development; Political processes; Rent-seeking; Conflict; Alliances; Coalitions (search for similar items in EconPapers)
JEL-codes: C72 D72 D74 D81 D82 N4 (search for similar items in EconPapers)
Date: 2004-02
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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