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We have explained the presence of heterogeneous winning coalitions in social revolutions. In an overcrowded agrarian society, two almost identical non-productive enforcers, the landed political elite, collude and bargain over transfers with one of the two peasants to contest over a piece of land, as property rights for land are not well defined. In any other scenario, neither the grand coalition nor the coalition of two peasants and one enforcer forms, thereby deposing the other enforcer with positive probability. So, social revolutions never occur. If foreign wars weaken an enforcer, such as in China (1911), France, and Russia, adding one unit of capital makes the coalition of the peasant, the now worker, and one of the enforcers (now an industrial political elite) attractive: The excess labor can work with it; the weaker enforcer retaliates less and the stronger one more, if excluded. However, if the weaker one (the still-landed political elite) proposes first, a grand coalition forms in which he or she gets less than the other members do (desertion). There is conflict among peasants and among landed elites; thus, the concept of a coalition is more appropriate than that of a class.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Networks with Group Counterproposals SummaryWe study two n-player sequential network formation games with externalities. Link formation is tied to simultaneous transfer selection in a Nash demand like game in each period. Players in groups can counterpropose. We give necessary and sufficient conditions for efficiency in terms of cyclical monotonicity. The n-player group version always yields efficiency. Keywords AbstractWe study two n-player sequential network formation games with externalities. Link formation is tied to simultaneous transfer selection in a Nash demand like game in each period. Players in groups can counterpropose. We give necessary and su¢ cient conditions for e¢ ciency in terms of cyclical monotonicity. The n-player group version always yields e¢ ciency.

We study the role of an enforcer in the effectiveness of selective incentives in solving the collective action problem when groups take part in a contest. Cost functions exhibit constant elasticity of marginal effort costs. If prize valuations are homogeneous, our source of heterogeneity induces full cost-sharing and the first-best individual contributions; further, the group probability of winning goes up. With heterogeneity in prize valuations, an increase in the effectiveness of the enforcer in conflict increases the group probability of winning only if the prize valuation of the enforcer is lower than de Lehmer mean of those of the other players; however, the induced partial cost sharing is not group efficient. If effectiveness "tends to infinity", the collective action problem is solved with partial cost-sharing if that prize valuation is not too low. Tragically, if productivity is low (if the prize is private in our set up) this occurs with corrupt coalitions which have been shown to form together with conflict and inequality endogenously; otherwise, this occurs with non corrupt coalitions. Further, even if such valuation is too low the group winning probability goes up. In this latter case, over costsharing yields group efficiency.

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