The Value of Rents and the Likelihood of Conflicts

Bennour, Khaled (2008): The Value of Rents and the Likelihood of Conflicts.

Abstract

This paper extends the prey--predator model of Grossman and Kim (1995) to analyze the relation between the value of the contested rent and the emergence of a conflict. We show that an increase in the value of the rent makes the conflict equilibrium more likely. We also analyze the case where the valuation of the rent is different for the two players. We find, for example, that a conflict equilibrium may occur even though the predator has an important disadvantage in warfare. That's when its valuation of the rent is sufficiently high compare to that of the prey.

• Item Type: MPRA Paper
• Language: English
• Keywords: Conflict-size
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict ; Conflict Resolution ; Alliances ; Revolutions

References

Baker, M. J., 2003. An Equilibrium Conflict Model of Land Tenure in Hunter-Gatherer Societies, Journal of Political Economy, 111, 124-173.

Bergeijk, P. V., 1994. Economic Diplomacy, Trade, and Commercial Policy: Positive and Negative Sanctions in a New World Order, Vermont: Edward Elgar.

Caselli, F., Coleman, J., 2005. On the Theory of Ethnic Conflict, NBER WP 12125.

Collier, P., Hoeffler, A., 2004. Greed and Grievance in Civil War. Oxford Economic Papers, 56, 663-695.

Glick, R., Taylor, A. M., 2005. Collateral Damage: Trade Disruption and the Economic Impact of War, working paper.

Grossman, H. I, Kim, M., 1995. Swords or Plowshares? A Theory of the Security of Claims to Property, Journal of Political Economy, 103, 1275 --1288.

Konrad, K., 2002. Investment in the absence of property rights; the role of incumbency advantages, European Economic Review, 46, 1521 -- 1537.

Meland, F., Straume, O. R., 2005. Outsourcing in contests, mimeo.

Mansfield, E. D., Bronson, R., 1997. Alliances, Preferential Trading Arrangements, and International Trade. American Political Science Review, 91, 94-107.

Olsson, O., 2007. Conflict Diamonds, Journal of Development Economics, 82, 267-286.

Pollins, B., 1989a. Conflict, Cooperation, and Commerce: The Effect of International Political Interactions on Bilateral Trade Flows. American Journal of Political Science, 33, 737-761.

Sachs, J. and A.M. Warner. 2000. `Natural Resource Abundance and Economic Growth'. In Leading Issues in Economic Development, 7th ed. G.M. Meier and J.E. Rauch, Oxford University Press.

Sachs, J., Warner, A. M., 1997. Natural Resource Abundance and Economic Growth. Harvard University, mimeo.

Sachs, J., Warner, A. M., 2001. The curse of natural resources. European Economic Review, 45, 827--838.

Skaperdas, S., Syropoulos, C., 1996. Competitive Trade With Conflict, in M.R. Garfinkel and S. Skaperdas,(eds.) The Political Economy of Conflict and Appropriation, 73-95, New York: Cambridge University Press.

Skaperdas, S., and C. Syropoulos, C., 2001. Guns, Butter, and Openness: On the Relationship Between Security and Trade, American Economic Review, Papers and Proceedings 91, 353-357.

Stein, W. E., 2002. Asymmetric rent-seeking with more than two contestants, Public Choice, 113, 325-336.