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

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...

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Bibliographic Details
Published inEconomics letters Vol. 192; p. 109225
Main Authors Jelnov, Artyom, Klunover, Doron
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.07.2020
Elsevier Science Ltd
Subjects
Conflict
Contest
Peace
Preferences
Public good
Public services
D74
Contest
H41
Conflict
C72
Public good
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Summary: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. •We consider a model in which n players compete and then contribute to a public good.•The model can be used to understand conflicts in which rival sides share a common interest.•We derive a sufficient and necessary condition for a peaceful equilibrium.•A contest is not held when the weakest side is sufficiently strong.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2020.109225