bargaining enforcement and multilateral sanctions when is cooperation counterproductive scholars and policymakers generally assume that multilateral cooperation is a necessary condition for economic sanctions to be of any use however previous statistical tests of this assumption have shown that sanctions are more successful with lower levels of cooperation this puzzle calls into question established theories of economic statecraft as well as theories of international cooperation in this article i test possible explanations for the ineffectiveness of multilateral cooperation on sanctions events using james fearon s 1998 breakdown of cooperation into bargaining and enforcement phases as a framework for discussion the empirical results show that when multilateral economic sanctions fail their failure is due to enforcement not bargaining problems without the support of an international organization cooperating states backslide from promises of cooperation backsliding occurs because of domestic political pressures and uncertainty about the intentions of the other sanctioning countries backsliding causes an initial burst of cooperative behavior to decay over time without institutional support cooperation is worse than useless it is counterproductive this result suggests that international cooperation is a more fragile equilibrium than previously thought but undercuts realist arguments that international organizations are unimportant

the political economy of conflicts over wealth why don t the rabble expropriate the rich the most striking feature of liberal democracies is the coexistence of large inequalities of wealth with a roughly egalitarian distribution of voting power so far most attempts to explain this have asked why don t the poor form a coalition to expropriate the rich this paper argues that this is not necessarily the best way to interpret the problem and attempts to provide an alternative unified political economic model that is more consistent with standard assumptions about voting this is done by studying what would happen if every possible coalition could form in a wealth distribution game among the main findings is that if the marginal contribution of every individual to production is increasing sufficiently there is a stable distribution of the product this may include the egalitarian distribution if individuals are not so valuable there is no stable distribution

bioeconomics of sustainable harvest of competing species abstract the concept of maximum sustainable yield frontier msf is applied to a gause model of competing species maximizing the present value of economic rent under costless harvesting with positive discount rate implies optimal stock levels below the locus of msf stocks maximizing economic rent with positive harvesting costs and zero discount rate implies optimal stock levels above the locus of msf stocks it is shown how the optimal steady state stock levels are altered by changes in the exogenous discount rate harvest prices and harvest costs optimal harvesting might imply harvesting of one of the two species at a loss

migration and intergroup conflict abstract two groups in conflict produce and appropriate internally generated consumable output in a two stage game assuming equal within group sharing and endogenous group sizes it is shown how agents leave groups with high productive efficiency and migrate to groups with high appropriative and defensive capabilities

production and conflict models versus rent seeking models a production and conflict p c model and a rent seeking rs model are compared for one group two groups and k groups adding a new agent enlarges the pie in the p c model but causes the fixed size pie to be allocated on one more rent seeker in the rs model the total production or rent is distributed within and between groups according to the within group and between group decisiveness productive and fighting efficiencies and group sizes play a role the collective action problem is more severe for the rs model as group size increases the ratio of within group to between group fighting increases marginally toward a constant for the p c model while it increases convexly for the rs model adding an additional agent to each of two groups is more detrimental to the utilities in rs groups than in p c groups while adding a second group of agents when there is already one group of agents gives the reverse result the severe between group fighting in the p c model for many groups causes the p c model to be preferable for few groups while the rs model is preferable for many groups applications are considered to intergroup migration inside versus outside ownership divestitures mergers and acquisitions multidivisional versus single tier firms and u form versus m form of economic organization

the impact of disaster on the strategic interaction between company and government a company allocates a resource between safety effort and production the government earns taxes on production the disaster probability is modeled as a contest between the disaster magnitude and the two players safety efforts the model illustrates that safety efforts are strategic substitutes and inverse u shaped in the disaster magnitude the company s safety effort increases and the government s safety effort decreases in taxation taxation can ameliorate companies free riding on governments safety efforts with sufficiently large production the government prefers and the company does not prefer raising taxation above 0 for the government an upper limit usually exists above which taxation cannot be profitably increased the model shows how both or no players exert safety efforts when the disaster magnitude is small and large respectively and how they free ride on each other s safety efforts when the disaster magnitude is intermediate the company free rides when the unit production cost is low so that the large profits outweigh the negative impact of the disaster with endogenized taxation determined by the government the tax rate decreases in the disaster magnitude the unit production cost the government s unit cost of safety effort and how the company is negatively affected by the disaster the tax rate increases in the company s resource and how the government is negatively affected by the disaster the tax rate is weakly u shaped in the company s unit safety effort the model is illustrated with numerical examples and with the oil spill disasters by bp in 2010 and by exxon valdez in 1989

economic activity in the shadow of conflict i introduction production prices and welfare are altered when exchange emerges in an autarkic economy these same variables are likewise affected when appropriation arises in a production and exchange economy consider robinson crusoe who allocates resources to clothing and food the implicit relative price of clothing and the production consumption point are determined by crusoe s preferences and production possibilities when friday appears and exchange enters crusoe s world there is a change in all of the fundamental economic variables relative price production consumption and utility but suppose friday has the capacity to profitably seize some or all of crusoe s goods or resources crusoe might guard against such a contingency by building defenses sufficient defenses could induce friday to carry out an exchange that might otherwise not occur by allocating some of his resources to defense crusoe alters economic fundamentals including the existence of exchange itself throughout its history economics has generally ignored the effects of appropriation possibilities on production and exchange often however the three economic activities are enmeshed according to barraclough 1994 specialized production and trade became quite extensive in the ancient eurasian world because empires could provide protection for trading links more recently european colonial powers created trading empires based upon strong navies skaperdas and syropoulos 1996 mansfield 1994 today within russia and china there are numerous examples of intertwined production exchange and appropriation even in commonplace crime these activities can be interdependent a potential shoplifter could steal if the store s defenses are low or trade if defenses are high 1 when appropriation possibilities are overlooked the results of standard trade models can be misleading when the role of exchange is ignored the predictions of conflict models can be erroneous economists need a new class of models designed to investigate economic activity in the shadow of conflict where production exchange and appropriation are intertwined pure trade and pure conflict models will be special cases of these new integrated models 2 the fundamental goal of this paper is to contribute to the theoretical development of the new class of integrated models of production exchange and appropriation specifically we model a one time interaction between two agents as a sequential predator prey game with the potential for ricardian trade think of crusoe as a potential prey and friday as a potential predator crusoe moves first by allocating some resources to defensive fortifications to protect his remaining resources friday moves second and faces two options either allocate some resources to weapons in hope of seizing resources from crusoe or produce no weapons and pursue specialized production and trade the economic interactions among appropriation production and exchange depend on key parameters in the model relative resource endowments effectiveness of offensive weapons against defensive fortifications and weapons and consumer goods productivities within the model we show how conflict can be subdued by the potential of mutually beneficial exchange but at a resource cost that modifies fundamental economic variables like relative price production trade volume gains from trade and security of property the model also identifies the conditions under which conflict is so powerful that specialized production and trade cannot emerge further we discover that the integrated model opens up a new way to think about and measure the gains from trade a predator may gain from trade relative to predation or autarky but prefer that the exchange institution be precluded alternatively a predator may be indifferent about trade relative to predation or autarky but gain from the trade institution in section ii we present a general theoretical framework for integrating production exchange and appropriation in a one shot sequential game

the economics of country specific tariffs a three country model of the world economy is used to show that when effective a country specific tariff will have an impact on the world economy that is equivalent to the imposition of a uniform tariff plus a subsidy to the production of home importables in the favored country financed by a transfer from the home country lerner s symmetry theorem and the optimum tariff problem are discussed country specific tariffs were a prominent feature of the congressional debate surrounding the recent u s trade bill a preliminary version of the bill which passed the house contained the well known gephardt amendment that would have required increased tariffs or quotas on imports from countries running unacceptably large bilateral trade surpluses with the u s in addition since 1976 the u s has allowed most goods produced in less developed countries to enter duty free under its version of the generalized system of preferences the country specific nature of these preferences runs contrary to all previous u s trade policy and sparked controversy in the u s congress when the original legislation was passed in 1974 and again when it was extended in 1984 while country specific tariffs are a relatively new feature of u s trade policy they have an established history in other countries prior to joining the european economic community great britain granted preferential tariff rates on imports from the commonwealth countries moreover these countries granted tariff preferences to less developed countries nearly five years before the u s initiated its general system of preferences program a proper theoretical analysis of country specific tariffs and preferential tariff reductions requires a multi country model however most work on tariff policy uses the standard two country framework almost all of the multi country models found in the literature consider only uniform tariffs or as in the customs union literature consider preferential tariffs as part of a multilateral effort to coordinate trade policies rather than as a unilateral policy instrument an exception is the partial equilibrium analysis of mcculloch and pinera 1977 they consider a three country world economy and examine the impact of a preferential tariff reduction

an ecological economic assessment of deregulation of international commerce under gatt this paper discusses the ecological economic implications of deregulation of trade as promoted by the general agreement on tariffs and trade gatt 1 this includes both environmental2 and socio economic factors such as standards of living and equity we outline fifteen overlapping problems with deregulation or free trade we argue that many environmental problems cannot be resolved equitably efficiently or sustainably by unregulated markets and that there is no alternative to public intervention in certain situations we repeat the 1987 brundtland commission s question of how far into international trade should regulation penetrate wced 1987 the commission s call for gatt s environmental reform 3 has not yet been heeded

the generalized theory of transfers and welfare bilateral transfers in a multilateral world paul samuelson s 1952 1954 classic papers on the transfer problem addressed two separate analytical issues the positive effect of a transfer on the terms of trade and the welfare effect of the transfer on the donor and the recipient since then a considerable body of literature has grown up on the positive analysis while samuelson 1954 himself had extended the 2 x 2 x 2 free trade analysis to allow for tariffs and transport costs subsequent writers have analyzed other extensions of the model for example to allow for nontraded goods as with leisure in samuelson 1971 or general nontraded goods in john chipman 1974 and ronald jones 1970 1975 remarkably however the welfare analysis of transfers has not paralleled these developments since wassily leontief 1936 produced an example of immiserizing transfer from abroad and samuelson 1947 argued that the example required market instability the proposition that has monopolized attention has been that a transfer in the conventional 2 x 2 x 2 model in its free trade version cannot immiserize the recipient or enrich the donor as long as world markets are stable in the walras sense interestingly samuelson 1954 who did extend the positive analysis to include tariffs did not go on to ask whether immiserization of the transfer recipient and hence symmetrically enrichment of the donor in a two country model could now arise consistent with market stability recently the welfare analysis of transfers has been extended in two different directions both apparently unconnected and both yielding the conclusion that transfers from abroad can be immiserizing and that the donor may improve its welfare despite market stability one route to this conclusion has been the introduction of a third economic agent or country that is outside of the transfer process in the appendix of his 1960 paper analyzing the interaction between trade policy and income distribution harry johnson discussed the possibility of welfareparadoxical redistribution between two factor income classes capital and labor in an open economy thereby providing what can be interpreted as a treatment of the threeagent transfer problem for the case in which donor and recipient are both completely specialized in the ownership of a single different factor an independent analysis of the three agent transfer problem using a restrictive model with given endowments of goods and fixed coefficients in consumption was also undertaken in an important paper by david gale 1974 2 brecher and bhagwati bhagwati department of economics columbia university new york ny 10027 brecher department of economics carleton university ottawa on kis 5b6 hatta department of political economy the johns hopkins university baltimore md 21218 we thank the national science foundation grant no 524718 for partial financial support of the research underlying this paper the paper was written when brecher and hatta were visiting columbia university 1981 82 gratefully acknowledged are helpful comments and suggestions from john chipman avinash dixit jacques dreze robert feenstra jacob frenkel ronald jones murray kemp andreu mas colell michael mussa john riley lars svensson and robert willig from anonymous referees and from seminar participants at berkeley harvard minnesota rochester chicago and the university of california los angeles after the present paper was submitted for publication and following its presentation at rochester our attention was drawn to this appendix which was noticed by a student of ronald jones subsequently we learned from makoto yano that motoshige itoh had pointed out an important related paper by ryuotaro komiya and t shizuki 1967 whose condition 11 for the johnson case anticipated our equation 12 below we are grateful for having both of these references brought to our attention 2 gale constructs an example in which the donor is enriched along with the recipient furthermore this immediately implies that a reverse transfer will immis

distributional conflict in organizations abstract hierarchy can function as an instrument to channel influence activities or power struggles in organizations contrary to what has frequently been argued we show that multi divisional organizations may involve lower influence costs than single tier organizations even though they offer more scope for organizational conflict and have more executives that can be influenced these benefits derive from two effects first part of the conflict in multi divisional organizations takes place on the division level where a small number of agents fight over only a fraction of the overall prize second by grouping agents into common divisions multi divisional organizations create free rider problems in rent seeking our model sheds new light on the desirability of divestitures and the transition from the u to the m form by us corporations in the 1920s

trade barriers and the collapse of world trade during the great depression 1 introduction the contraction in world trade during the first phase of the great depression stands out as the strongest adverse shock to international trade in modern history from 1929 to 1932 world import and export volume in the industrialized nations decreased about 30 however it is not well understood which factors were responsible for the collapse the factors that have been highlighted in the literature are declining demand escalating tariff and nontariff trade barriers increasing bilateral trade agreements and international exchange rate policies the importance attributed to each of these factors has often been controversial pollard 1962 p 200 for instance argues that for britain the fall in total foreign trade as a proportion of home production was a part of a secular trend and may well not have been caused by the tariff as such by contrast khan 1946 p 246 claims that within 12 to 18 months uk nominal imports of manufactures from most of europe and the united states were reduced by something like 60 as a result of the tariff similarly saint etienne 1984 p 29 argues that by the mid 1930 s international trade had become in large proportion barter trade as a result of the tariffs and nontariff barriers empirical studies have examined the effects of trade restrictions on incomes to explain the declining trade for individual countries the studies of crucini and kahn 1996 and irwin 1998 find that the tariffs were influential for the u s imports and exports in his study of nominal imports to the european countries friedman 1974 quantified the effects of trade barriers on nominal imports and ultimately income by means of dummies in periods of significant tariffs and nontariff barriers he found that trade restrictions had a significant impact on trade in a few countries however as friedman himself acknowledges the weakness of this approach is that strong and weak forms of trade barriers are restricted to impact equally on imports in the estimates coupled with the small sample problems that plagued his estimates the trade barrier dummies were unlikely to effectively have captured the effects of trade barriers on imports which explains substantial variations of the estimated effects of the tariffs and the nontariff barriers across countries the study of eichengreen and irwin 1995 is probably the most extensive analysis of trade flows in the interwar period using 561 cross sectional bilateral trade flows over three periods 1928 1935 and 1938 they estimate a gravity model of trade patterns they relate the value of bilateral flows to national income population distance contiguity trade and currency block indicators and exchange rate variability to examine the effects on trade of trade and currency blocks and exchange rate variability they observe a declining marginal propensity to import and export during the depression which they attribute to quotas and other binding trade restrictions but do not formally test their importance this paper seeks to estimate the contribution of income tariffs and nontariff barriers on world trade during the depression using panel data for 17 countries over the period from 1920 to 1938 the panel data approach enables the assessment of the influence on trade of nontariff barriers from estimates of import and export functions by using as an identifying assumption that the nontariff barriers were to some degree simultaneously imposed and relaxed across the industrialized nations during the interwar period the estimates and extensive evidence from the literature suggest that this identifying assumption is valid section 3 in section 4 the changes in world trade in the interwar period are decomposed into income effects tariff effects and nontariff barrier effects the trade effects of the tariff changes are furthermore decomposed into deflation inflation induced tariff changes and discretionary tariff induced changes

conflict the sire of exchange violence is the sire of all the world s values robinson jeffers abstract utilizing a model of conflict with two goods three activities production predation and defense the paper shows that uncontested exchange is an impossibility all exchange is contested through a bargaining game extension of a predation game a characterization of an exchange spectrum is developed the metric for these exchange possibilities is based on threats of predation and exploitation i e conflict uncontested exchange walrasian market exchange is but one point along this spectrum and is not robust to exploitation

the distribution of income in a despotic society a distribution of income between rulers and subjects can be derived as an equilibrium of violence rather than from considerations of marginal products of owned factors of production society is organized in ranks and the occupants of each rank are provided with incomes just sufficient that obedience is preferable to rebellion to incorporate such considerations into a model it is necessary to recognize phenomena that are normally excluded from economic analysis combat the mortality rate from natural causes and from violence as a component of the utility function and a rudimentary technology of control

war pillage and markets neoclassical economic theory has produced an extensive body of knowledge about market exchange based on cooperative relations private property this leads to an artificial dichotomy between cooperation and conflict though it is best to view market exchange as lying along a continuum of conflict and cooperation conflict and cooperation are intertwined from a game theoretic model of hobbes world i show that a number of property rights structures are possible each is characterized as possessing varying degrees of conflict and cooperation finally from a repeated game i show how conflictual relations mutual predation may support more cooperative relations private property this new equilibrium is sub game perfect

trade tropical deforestation and policy interventions trade interventions are increasingly advocated as a means for controlling timber related tropical deforestation this paper analyzes the impact on deforestation of such policy instruments in a dynamic framework the forest is modelled as a potentially renewable resource and timber is extracted for purposes of export and domestic consumption optimality conditions for a variety of model specifications are derived and the impacts of changes in the terms of trade and market structure on long run deforestation are analyzed the results of this analysis suggest that trade interventions that seek to affect the terms of trade against the export of tropical timber products are in the long run a second best policy option for influencing the deforestation process

a general equilibrium model of two group conflict with endogenous intra group sharing rules this paper explores the interactions among intra group sharing rules the competition between two groups over the common pool of output and the allocation of resources between productive and appropriate activities in the interior solution the use of egalitarian method for the distribution of group income among members plays no distributional role but only affects the allocation of resources it releases resources into the productive sector from the group that adopts the egalitarian rule by making the internal conflict among the members less intense the sequential choice of intra group sharing rules and resource allocations produce the adoption of fully egalitarian intra group sharing rules in both groups these rules minimize the amount of resources allocated to appropriate activities and maximize the welfare level of all individuals in the economy this result suggests that inter group competition with the use of egalitarian principle in the distribution of group income among group members which is not available to the hobbesian state of nature is one of the cheaper social devices in restraining individuals from engaging in costly appropriative activities

the distribution of income in the presence of appropriative activities we examine the distribution of income when agents allocate their initial endowments between production and appropriation arms investments influence or rent seeking activities final output depends on the productive contributions of the agents but is divided between them according to their relative contributions in appropriation various possible improvements in an agent s useful productivity reduce the agent s equilibrium share of income but increases in initial endowments increase an agent s share we contrast our results to those that would obtain in the competitive counterpart to our model and discuss its relevance both for history and for the present the results extend to a class of models where distribution is determined between two groups of agents with agents within each group behaving non cooperatively but without exhibiting the free rider problem

endogenous sharing rules in collective group rent seeking this paper examines the possibility of endogenous determination of intra group sharing rules in a collective group rent seeking game collective group rent seeking is considered as a two stage nash cournot game in which sharing rules are determined prior to individual decision on voluntary contribution the solution is subgame perfect and is obtained by backward induction in competition between two groups of the same size the nash equilibrium sharing rule of each group is to distribute rent to each according to relative effort total rent seeking outlays in this case are equal to those obtained by tullock 1980 when more than two groups compete for a rent the sharing rule based on relative effort is again likely to be the nash equilibrium strategy of each group the amount of total rent seeking outlays is also equal to that in tullock 1980 in a nutshell the rent is substantially dissipated if sharing rules are endogenously determined

collective rent dissipation the theory of rent seeking was initiated by tullock 1967 1980 followed by krueger 1974 and posner 1975 and more recently extended in various directions by allard 1988 appelbaum and katz 1986a b c gradstein and nitzan 1989 hillman and katz 1984 1987 hillman and samet 1987 hillman and riley 1989 katz et al 1990 long and vousden 1987 ursprung 1990 and varian 1989 the purpose of this paper is to extend this theory by introducing the possibility of collective group rent seeking with voluntary individual decisions regarding their extent of participation in the collective rent seeking efforts

war and peace cyclical phenomena this paper demonstrates how the analysis can differ dramatically between two common static modeling approaches to conflict the first approach uses a one period setup and associates positive arms investments with conflict the second approach has two periods where arming decisions are taken in the first period and the decision on whether to go to war is taken separately in the second building on the latter approach i introduce a repeated game protocol with myopic players under these circumstances countries may end up in cycles of war and peace this result offers a novel explanation for a common pattern in history

whether to attack a terrorist s resource stock today or tomorrow reprinted from games and economic behavior 64 2 kjell hausken whether to attack a terrorist s resource stock today or tomorrow pages no 548 564 copyright 2008 with permission from elsevier

anarchy and its breakdown anarchy defined as a system in which participants can seize and defend resources without regulation from above is not chaos but rather a spontaneous order however anarchy is fragile and may dissolve either into formless amorphy or into a more organized system such as hierarchy under anarchy each contestant balances between productive exploitation of the current resource base and fighting to acquire or defend resources anarchy is sustainable only when there are strongly diminishing returns to fighting effort the decisiveness parameter is sufficiently low and incomes exceed the viability minimum these considerations explain many features of animal and human conflict

a strategic analysis of the war against transnational terrorism abstract we study a two stage game in which a transnational terrorist organization interacts with an arbitrary number of countries that may differ in their political or economic power their military effectiveness the benefit from cooperating against terrorism and the value they assign to damage only a subset of countries that emerges endogenously takes proactive measures to fight the terrorist while all countries incur defensive expenditures to protect their soil we characterize analytically the pure strategy subgame perfect equilibrium of the game and show how the equilibrium strategies depend on the key model parameters we provide an algorithm to find the endogenous set of cooperating countries based on their benefit from cooperation and their political economic power

deterrence preemption and panic a common enemy problem of terrorism we develop a game theoretic analysis of terrorism that examines the interaction between a terrorist organization and multiple target countries and considers both pre emption and deterrence as counter terrorist policies the damage from terror includes not only the material cost of fatality injury and loss of property but also the resultant fear the fear effect leads to different kinds of equilibria and implications for counter terrorism policies in particular the model identifies conditions under which greater pre emption may be the rational response to an increase in terrorism i e it analyzes the merit of the dictum offense is the best defense further it examines the characteristics of cooperative behavior among target countries in dealing with the threat of terrorism

might makes rights a theory of the formation and initial distribution of property rights this paper is a theoretical and empirical investigation into the formation and initial distribution of property rights violence is singled out as a major constraint on this formation process its role is explicitly modeled in a choice theoretic framework and some of the implications are tested using data collected from contracts written during the california gold rush of 1848

welfare aspects of the transfer problem using the standard trade model with three countries and allowing for substitutability in both production and consumption this paper demonstrates that a country may gain by giving a transfer that the receiver may lose and that these two phenomena may appear at the same time this result is an extension of gale s example in a fixed coefficient model where he shows both transferer and transferee may become better off harming the third country and it is contrasted with the traditional welfare proposition whereby a giver is immiserized and a recipient is enriched

between group contests over group specific public goods with within group fragmentation we model a contest between two groups of equal sized populations over the division of a group specific public good each group is fragmented into subgroups each subgroup allocates effort between production and contestation perfect coordination is assumed within subgroups but subgroups cannot coordinate with one another all subgroups choose effort allocations simultaneously we find that the group that is more internally fragmented receives the smaller share of the public good aggregate rent seeking increases when the dominant subgroups within both communities have larger population shares any unilateral increase in fragmentation within a group reduces conflict and increases the total income of its opponent strikingly the fragmenting community itself may however increase its total income as well even though its share of the public good declines hence a smaller share of public good provisioning cannot be used to infer a negative income effect on the losing community

cooperation and between group competition abstract introducing competition between groups may induce cooperation to emerge in defection games despite considerable cost of cooperation if the groups can confine themselves to a cooperative sector either by providing incentives to raise the cooperation level in one group or by providing disincentives so that the cooperation level in the other group gets lowered to match that of the first maximum degrees of cooperation can be obtained the cooperative sector broadens as the degrees of cooperation increase or the cost of cooperation decreases or the group benefits of cooperation increase

distributional conflict and jurisdictional organization abstract this paper explores the endogenous formation of jurisdictions assuming the political process is a costly fight to acquire shares of the gnp pie in such a setting the stability of a unified jurisdiction is not necessarily determined by the preferences of the richest member region we also show that a system of federalism is especially significant in ameliorating distributional competition and conflict less resources are spent in aggregate on appropriative activities under a hierarchical system of federalism than in a unified jurisdiction with a single central government

trade policy and ecology trade sanctions on product exports are often used as measures for conservation of stocks of living resources two opposing approaches are investigated the harvest approach argues that sanctions reduce the harvest and thus protects the stock it is shown that this does not consider the long run effects nor the effects of sanctions on the management system the investment approach argues that increased price protects the stock making the species a profitable investment it is shown that this approach does not consider the asset effects of price changes and that the sanctions usually increase the stock in an one species analysis if the wildlife competes for land the conclusions may be different but still sanctions usually works if the manager has a joint management of several species the stock effects of sanctions are ambiguous depending on both the species interaction and the profitability of the harvesting from each of them in this case it is not possible to use intuitive reasoning sanctions give distortions to all stocks simultaneously the threat of extinction depends crucially on the unit cost in harvesting of depleted stocks the paper concludes that trade policy is a too general measure for the management of living resources and may implicate important economic distortions to the ecological system

revenge or continued attack and defense in defender attacker conflicts abstract existing literature has demonstrated that exacting revenge can have a self deterrence effect and a value of revenge effect the former means that each player will decrease effort when competing for a resource because of fear of a rival s revenge while the latter implies that each player will increase effort in the revenge period moreover the self deterrence effect could outweigh the value of revenge effect implying that revenge could be helpful in stabilizing conflicts a phenomenon known as the paradox of revenge we re examine the two effects and the paradox of revenge in defender attacker conflicts considering a scenario in which a defender and only the defender who was attacked in the first period takes revenge on the attacker in the subsequent period we demonstrate that whether or not these results hold depends on how much the defender values revenge and the difference between the two players efficiencies of effort more interestingly we show that a sufficiently large revenge value for the defender can deter an attack from the attacker in the first place

protection and performance we examine the linkages between import policy and export performance extending classic macroeconomic trade effects to more recent concepts from the modern literature on gravity models we also examine these effects empirically with a panel of global and bilateral trade spanning 15 years our emphasis on the role of import policy i e tariffs of exporters as an explanation of trade volumes contrasts with the recent emphasis on importer policy in the gravity literature it also reinforces the growing body of evidence on the importance of economic environmental policy and infrastructure conditions in explaining relative export performance and is in line with the literature on global value chains

multi battle contests an experimental study this study examines behavior of subjects in simultaneous and sequential multi battle contests in simultaneous contests subjects make positive bids in each battle 80 of the time and bids fall within the predicted boundaries however 35 of the time subjects make positive bids in only two instead of all three battles and they significantly overuse moderately high bids in sequential contests theory predicts sizable bids in the first battle and no bids in the subsequent battles contrary to this prediction subjects significantly underbid in the first battle and overbid in subsequent battles consequently instead of always ending in the second battle contest proceeds to the third battle 38 of the time finally in both simultaneous and sequential settings subjects make higher aggregate bids than predicted resulting in negative expected payoffs

regulating endangered species endangered species timothy swanson one important issue at the earth summit in rio de janeiro was the preservation of diverse biological resources or biodiversity to date the regulation of endangered species has been based on the premise that over exploitation is the principal problem this diagnosis has led to a wide range of attempts to destroy demand for wildlife by means of bans on trade and consumption of the products of endangered species this approach misses the fundamental cause of the problem terrestrial species compete for land land use primarily reflects human decisions about its allocation even over exploitation is the result of human allocation decisions species that are overexploited are those for which society chooses not to invest in their management species that survive are thus those in which humans chose to invest whilst extinction should be interpreted as disinvestment in species or their ancillary resources habitat management trade bans do not address this fundamental cause of extinction the paper sets out how demand should be constructively managed to encourage continuing investment in endangered species

rent seeking for pure public goods in this paper we present a formal analysis of rent seeking for public goods by two or more groups with different numbers of individuals we begin by considering equally wealthy groups under risk neutrality a case which constitutes our basic model several surprising and interesting results emerge from the analysis of this basic case the problem is then extended to deal with a groups with different wealth levels and b risk aversion this last extension brings about a further crop of interesting and useful results

trade liberalisation resource sustainability and welfare the case of east baltic cod abstract recent research has warned that liberalising trade in capture fish products originating from inefficiently managed fisheries might cause over exploitation reduced fish stocks and thereby a reduced steady state of welfare this paper qualifies the warning in a case study of the east baltic cod market by developing an age structured bio economic supply model combined with basic theory of trade between two countries welfare effects of trade liberalisation are identified taking fishing quotas input limitations mesh size regulations and shared ownership of stocks into account it is shown that although liberalising trade in products supplied by such a fishery might cause steady state welfare reductions in the supplier countries these welfare reductions are small compared to the welfare gains from a hypothetical change to optimal management hence the introduction of better fisheries management is much more important than trying to meet potential negative consequences of trade liberalisation since even small improvements in fisheries management may offset the negative effects of trade liberalisation

rent seeking with non identical sharing rules the primary object of this paper is to examine the role of differential sharing rules within a collective rent seeking setting on the possible non existence of nash equilibrium focusing on groups that distribute part of the rent equally among their members and the residual according to relative effort we show that in rent seeking societies applying the two polar sharing rules equilibrium never exists in the general case where groups apply different but not necessarily the polar sharing rules we study the relationship between group variability in distributing rents and the problem of non existence of equilibrium in the rent seeking game

guns butter and openness on the relationship between security and trade sovereign states arm to defend real or hypothetical interests presumably because they cannot engage in complete long term contracting that would prevent such arming international trade therefore takes place within an essentially anarchic context and we can expect trade regimes and security policies to be related indeed many embargoes sanctions and various other forms of trade restrictions that have been used throughout history and continue to be used today can be considered extensions of security policies whereas some security policies can be attributed to trade policy the relationship between trade and security however has been barely explored within economics we could fairly characterize the prevailing view within the discipline as the classical liberal view according to which the expansion of international trade does not just increase the welfare of the trading partners but can also patch up any differences they might have over other contentious issues solomon polachek 1980 represents a rare articulation of this widely held perspective more boldly it could be argued that the expansion of trade always alleviates conflict by forcing the adoption of measures that manage conflict nevertheless one does not need to dig much into history to show that while trade and economic interdependence can contribute to the peaceful resolution of disputes they are not sufficient by themselves to guarantee the absence of war and the reduction of arming many observers before world war i for example considered that the hitherto unprecedented expansion of trade and interdependence between britain and germany made war unthinkable and impossible yet war occurred and with much ferocity and destruction furthermore as donald kagan 1995 pp 373 80 has argued the british policy of appeasement toward germany during the 1930 s was based on similar arguments about the use of economic caltots to avoid war what can inter

collective contests for commons and club goods abstract this paper focuses on collective contests for commons and club goods our main objective is to examine in this context the effect of group size on its performance the main results specify conditions for the existence non existence of the group size paradox namely the situation where a larger group is less more effective in pursuing its interest because of despite the combined effect of the incentives that result in the free riding problem and the tragedy of the commons the paper also explains under what circumstances there exists a bias towards excessive or inadequate winning group size finally it examines the effect of restricted excludability of the commons good within the winning group on the relationship between group size and its winning probability

harvesting and conserving a species when numbers are low population viability and gambler s ruin in bioeconomic models abstract in bioeconomic models of renewable resources population viability is either ignored entirely or the minimum viable population mvp is considered a crisp threshold below which a species is driven to extinction neither is consistent with ecological science the purpose in this paper is firstly to enhance ecological realism in economic models by incorporating insights regarding population viability from conservation biology we consider the effects of chance on optimal management and briefly discuss key results regarding population viability as derived by biologists second as a means to balance interests and morality we suggest a fuzzy compromise between the economist s and the biologist s preferred stock sizes

group contests with internal conflict and power asymmetry we investigate simultaneous inter and intra group conflict in the shadow of within group power asymmetry and complementarity in members group conflict efforts a more symmetric group faces a higher degree of internal conflict and might expend more effort in external conflict when the group conflict effort technology is highly complementary depending on the degree of complementarity the stronger player s relative contribution to external conflict might be higher in a more asymmetric group and as a result it is possible for the weaker player to earn a higher payoff in the absence of any complementarity the rent dissipation is non monotonic with the within group power asymmetry

swords or plowshares a theory of the security of claims to property this paper develops a general equilibrium model of the allocation of resources among appropriative and productive activities the model emphasizes the distinction between offensive weapons which are the instruments of predation and fortifications which provide defense against predation the analysis of this model shows how the equilibrium security of claims to property is determined the analysis focuses on the possibility of a nonaggressive equilibrium in which no resources are allocated to offensive weapons and claims to property are fully secure we also analyze the complex relation between economic welfare and the security of claims to property we find for example that a relatively poor agent could be better off in an equilibrium with less secure claims to property

do rent seeking groups announce their sharing rules i introduction rent seeking can be seen all around us firms or coalitions of firms expend resources to influence government officials who have authority to award monopoly rights self interested pressure groups lobby for government subsidies foreign producers exert effort to avoid imposing tariffs or quotas on their products interest groups or lobbyists contribute to the election of politicians who promise to advance favorable legislation research and development rd then the groups announce their decisions simultaneously before choosing their sharing rules we examine the groups decisions on releasing sharing rule information their sharing rules and the effort levels and payoffs of the individual players in equilibrium we formally consider the following three stage game in the first stage each group decides and announces whether it will release to the rival group the information about its sharing rule which will be determined in the second stage in the second stage the players in each group jointly choose their sharing rule and then each group releases the information about its sharing rule if it decided to do so in the first stage in the third stage all the players in both groups choose their effort levels simultaneously and independently at the end of this third stage the winning player is chosen and the winner shares the prize with the other players in his group according to the sharing rule on which they agreed in the second stage solving the game we find the following first the case where both groups release their sharing rule information never occurs in equilibrium second the case where neither group releases its sharing rule information occurs only if the players are evenly matched third when the players are unevenly matched one group releases its sharing rule information and the other does not

mutual raiding of production and the emergence of exchange joint exchange and raiding can emerge in a world of mutual raiding when the appropriated production is less valuable to the appropriator than to the defender and the defense is not too inferior to attack the amounts of resources allocated to production and raiding and the amounts of goods exchanged reciprocally are determined endogenously the model reduces to pure exchange and pure raiding as special cases pure exchange emerges when the usability of appropriation is sufficiently low pure raiding emerges if the defense is sufficiently inferior to attack the results of the model are intermediate between the results of the two extreme cases jel c6 c72 d51 d72 d74 f10 i introduction in the american civil war each side to some extent looted the other still some true reciprocal exchange between the two sides was conducted by blockade runners whereby the south exported cotton and imported manufactured goods varying across time space pure market exchange may be supplemented by or grow out of such activities as war piracy 1 corruption 2 extortion 3 crime 4 plundering or theft referred to as raiding or mutual raiding generally agents individuals groups companies nations can meet their consumption needs by exchange of goods in accordance with comparative advantage or else by attempts at confiscating the other s production resources goods or trade flows each route has been the subject of separate study this article develops a model in which the equilibrium balance between the two ways of acquiring desired goods is determined by the values of various parameters governing the productive and conflictual processes involved how can exchange conducted voluntarily and with mutual advantage emerge in a world where appropriation and defense through mutual raiding appear to be more natural means of survival 5 classical economics describes how agents exchange goods reciprocally voluntarily and nonviolently 6 political economy describes how agents appropriate and defend one productive resource without reciprocal exchange 7 a few authors attempt to integrate production exchange and appropriation 8 this article lets two agents exchange goods reciprocally and raid each other s production mutually hausken 2003 33 36 classifies the 78 possible models in the exhaustive spirit of rapoport and guyer 1966 for how one or several of the five objects production resources consumption goods exports and imports can be set under attack as is also the case for rider 1999 anderton et al 1999 and anderton 1999 this article utilizes ratio forms of the contest success function 9 reduction to a pure exchange model presented in section ii or a pure raiding model occurs by adjusting parameters also assuming raiding of production rider 1999 claims that pure exchange is impossible 10 which is correct when the production is equally valuable to the appropriator and defender rider shows that in the absence of pure exchange it could turn out and in fact it inevitably turns out that the advantages of diversified consumption achieved by mutual raiding exceeds the wastage of fighting effort if his result were universal one would not observe pure exchange in the real world which in fact we do accordingly this article shows that rider s 1999 result is not inevitable even when accepting his assumption that each agent produces only one of the two desired goods we believe that the two characteristics value of appropriation and superiority of defense over attack 11 are realistic and help explain the empirics as well as reciprocal exchange in the real world 12 regarding the first characteristic grossman and kim 1995 1279 present the following argument which is contrary to most contest models which let appropriated objects be equally valuable to the appropriator and the defender we also allow for the possibility that predation is destructive by which we mean that in any appropriative interaction the predator gains less than the prey loses

equilibrium structure in an economic model of conflict four different types of equilibrium are possible within a two player model of society where only armed self enforcement of property rights is possible the main underlying parameters are the total resource endowment and the initial distribution of this endowment between the players the parameter space is partitioned into regions in which the respective types of equilibrium occur the equilibrium types involve positive arms expenditure by respectively neither player the richer player and both players the latter case involves a sub type in which the poorer player s entire endowment is expended on arms jel d30 d72 d74