Rivalry, Exclusion, and Coalitions

Abstract

We analyze a situation where individuals and coalitions can obtain effective property rights over a resource by means of an exclusion contest. Coalitions face a trade-off when they decide to incorporate new members: Big groups control the resource more likely but individual property rights are more diluted. Under cooperative explotation of the resource the grand coalition is the efficient partition. It is also stable if players are committed to minimize deviators' payoffs. This is not the case when players play best responses and the conflict technology is sufficently effective with respect to the concavity of the production function: Then there is a strong tendency towards bi-partisan conflicts. Moreover, under non-cooperative exploitation of the resource, conflict may be socially efficient and Pareto dominate free access.JEL classification codes: C71, D62, D74

Models of coalition or alliance formation

“…For the sake of tractability, costs of fighting may be either completely absent from the reward function (e.g., Noh, 2002;Sá nchez-Pagé s, 2007b;Skaperdas, 1998;Stamatopoulos et al, 2009;Tan and Wang, 2010) or chosen primarily for analytical convenience in framing a theoretical issue (e.g., Esteban and Sá kovics, 2003). Nevertheless, as in the case of strategies, typically costs are based on stylized facts distilled from empirical evidence.…”

Conflict, private and communal property

“…In our modelling framework we follow Grossman's [9] model on the appearance of property rights. 1 As in Sanchez Pages [16], "free access" is defined as an agreement (i.e. coalition) between all agents to share collectively a valuable resource.…”

“…In the four agent example the possible coalition structures are [{1, 1, 1, 1}], [{1, 1, 2}], [{2, 2}], [{1, 3}] and [{4}]. Without loss of generality we will assume that a Bloch's protocol sets andorder (a, b, c, d) among agents and, to simplify our exposition, we denote the possible coalition structures consequently (this is, in fact, the notation used by Sanchez Pages[16]). Therefore we will refer, from now on, to the coalition structures [{a, b, c, d}], [{a, b, cd}],…”

Coalition Formation in Games with Externalities

“…The assumption of exogenous payoff division is common in applications (e.g. [5,48,67]). Kóczy [44] finds a connection between the equilibria of a modification of Bloch's [9] game and the recursive pessimistic core.…”