When does the private provision of a public good prevent conflict?

Artyom Jelnov, Doron Klunover

Research output: Contribution to journalArticlepeer-review

Abstract

We consider a two-stage model, in which n players with the same preferences and different incomes compete for a common value prize and then contribute to a pure public good. We derive the sufficient and necessary condition under which there exists a Subgame Perfect Equilibrium in which a contest is not held. In particular, in order to maintain peace, the “poorest” player needs to contribute to the public good in every realization and therefore cannot be too poor. Peace therefore depends on the strength of the weakest player as well as on the value of the prize. The model may help in understanding conflicts between countries with a common interest.

Original languageEnglish
Article number109225
JournalEconomics Letters
Volume192
DOIs
StatePublished - Jul 2020
Externally publishedYes

Keywords

  • Conflict
  • Contest
  • Public good

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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