Economic Theory Commons^™

A Theoretical And Empirical Framework To Estimate The Impact Of Conflict On The Economic Resilience Of Clustered Firms In Ukraine, Alexander D. Ginn

Electronic Theses and Dissertations

In this thesis, I develop a theoretical and empirical framework to estimate whether participation in industrial clusters contributes to firm-level economic resilience to conflict-based shocks. Focusing on Ukraine following the full-scale Russian invasion in February 2022, the study situates industrial organization and firms’ resilience to conflict within a dynamic environment characterized by spatially heterogeneous exposure to conflict events and persistent institutional constraints. I document how Ukraine’s contemporary economic geography reflects the interaction of Soviet-era industrial path dependence, uneven post-transition institutional development, and conflict-induced reconfiguration, evaluating how these dynamics generate systematic variation in both firms’ baseline vulnerability and their exposure to …

Organizing To Engage: A Framework For Conflict Strategy, Paul Mason Carpenter

Dissertations

Conflict strategy can be exceedingly complex. While many of the basics are simple, even the simple can be highly complicated to execute. The Schlieffen Plan in World War I appeared straight forward, but execution was a great deal more complex. It failed and the result was years of trench warfare.  In addition, leaders entering conflict may not fully appreciate the full context, its effect, and the need for a long term result--a better state of peace.

Strategy and tactics may be challenging to transform as an engagement evolves. In addition, strategists must often commit to courses of action within very …

Experimental Research On Contests, Subhashish M. Chowdhury, Dan Kovenock, Anwesha Mukherjee

ESI Working Papers

Contests are situations in which agents compete by irreversibly expending costly resources in an attempt to win a prize. Due to their applications in conflict, rent-seeking, organizational incentives, sports, litigation, and political campaigns, contests are widely applied in the social sciences. In this survey we summarize some main results and recent developments of experimental studies in contest theory. We also point out their broader applications in the social sciences.

Religion And Growth, Sascha O. Becker, Jared Rubin, Ludger Woessmann

ESI Working Papers

We use the elements of a macroeconomic production function—physical capital, human capital, labor, and technology—together with standard growth models to frame the role of religion in economic growth. Unifying a growing literature, we argue that religion can enhance or impinge upon economic growth through all four elements because it shapes individual preferences, societal norms, and institutions. Religion affects physical capital accumulation by influencing thrift and financial development. It affects human capital through both religious and secular education. It affects population and labor by influencing work effort, fertility, and the demographic transition. And it affects total factor productivity by constraining or …

Do Rational Agents Steal, Randy Hill

All Graduate Plan B and other Reports, Spring 1920 to Spring 2023

Do Rational Agents Steal?

Modern economists from Adam Smith to the present have broadly assumed that rational agents respect property rights. This respect for property rights has been a feature of nearly all economic models from the beginning. This paper examines a simple two person, production and trade model where the agents are allowed to choose to steal. Even within this simple model, there are a broad range of parameters that affect the agents' choices. In most parameter sets, the agents choose to steal as the reward for conflict outweighs the opportunity cost of not engaging in conflict. The parameter …

Conflict In The Pool: A Field Experiment, Loukas Balafoutas, Marco Faravelli, Roman Sheremeta

ESI Working Papers

We conduct a field experiment on conflict in swimming pools. When all lanes are occupied, an actor joins the least crowded lane and asks one of the swimmers to move to another lane. The lane represents a contested scarce resource. We vary the actor’s valuation (high and low) for the good through the message they deliver. Also, we take advantage of the natural variation in the number of swimmers to proxy for their valuation. Consistent with theoretical predictions, a swimmer’s propensity to engage in conflict increases in scarcity (incentive effect) and decreases in the actor’s valuation (discouragement effect). We complement …

Economic Experiments On Conflict, Information Acquisition, And Public Goods, Jeffrey Braxton Gately

Graduate Theses and Dissertations

This dissertation contains essays on economic experiments. The first chapter, “Well, at Least I Tried: Partial Willful Ignorance, Information Acquisition, and Social Preferences,” focuses on the effects of information acquisition on social decision-making. The second chapter, “Paved With Good Intentions: Partial Willful Ignorance and Group Identity in Public Goods Games,” focuses on the effect of information acquisition on contributions to public goods. I also explore human conflict in the third chapter, “Risk Preferences and Reform Paths: Experimental Evidence.”

In my first chapter, “Well, at Least I Tried: Partial Willful Ignorance, Information Acquisition, and Social Preferences”, I investigate whether remaining partially …

Shutdown Policies And Worldwide Conflict, Nicolas Berman, Mathieu Couttenier, Nathalie Monnet, Rohit Ticku

ESI Working Papers

We provide real-time evidence on the impact of Covid-19 restrictions policies on conflicts globally. We use daily information on conflict events and government policy responses to limit the spread of coronavirus to study how conflict levels vary following shutdown and lockdown policies. We use the staggered implementation of restriction policies across countries to identify their effect on conflict incidence and intensity. Our results show that imposing a nation-wide shutdown reduces the likelihood of daily conflict by around 9 percentage points. The reduction is driven by a drop in the incidence of battles, protests and violence against civilians. Across actors the …

The Relationship Between Conflict And Longevity: A Panel Data Analysis, Felicitas Adu-Acheampong

Wayne State University Dissertations

With a series of multivariate regression models this study investigates the association of conflict, health and non-health inputs with different facets of longevity in OECD, emerging and African countries. Using a country-level panel data set covering the period 1990 through 2014, five facets of longevity are examined: infant mortality, life expectancy for males at birth, life expectancy for females at birth, life expectancy for males at age 65, and life expectancy for females at age 65 among OECD and emerging countries. With country-level data spanning 1997 through 2016 from 50 African nations, production functions are also estimated for four distinct …

A Full Characterization Of Best-Response Functions In The Lottery Colonel Blotto Game, Dan Kovenock, David Rojo Arjona

ESI Working Papers

We fully characterize best-response functions in Colonel Blotto games with lottery contest success functions.

The Supply Side Determinants Of Territory And Conflict, Jordan Adamson, Erik O. Kimbrough

ESI Working Papers

What determines the geographic extent of territory? We microfound and extend Boulding’s “Loss of Strength Gradient” to predict the extensive and intensive margins of conflict across space. We show how economies of scale in the production of violence and varying costs of projecting violence at a distance combine to affect the geographic distribution of conflict and territory. We test and probe the boundaries of this model in an experiment varying the fixed costs of conflict entry. As predicted, higher fixed costs increase the probability of exclusive territories; median behavior closely tracks equilibrium predictions in all treatments.

War And Conflict In Economics: Theories, Applications, And Recent Trends, Erik O. Kimbrough, Kevin Laughren, Roman M. Sheremeta

ESI Working Papers

We review the main economic models of war and conflict. These models vary in details, but their implications are qualitatively consistent, highlighting key commonalities across a variety of conflict settings. Recent empirical literature, employing both laboratory and field data, in many cases confirms the basic implications of conflict theory. However, this literature also presents important challenges to the way economists traditionally model conflict. We finish our review by suggesting ways to address these challenges.

A Study Of The Triggers Of Conflict And Emotional Reactions, Michael Caldera, Michael T. Mcbride, Matthew W. Mccarter, Roman M. Sheremeta

ESI Publications

We study three triggers of conflict and explore their resultant emotional reactions in a laboratory experiment. Economists suggest that the primary trigger of conflict is monetary incentives. Social psychologists suggest that conflicts are often triggered by fear. Finally, evolutionary biologists suggest that a third trigger is uncertainty about an opponent’s desire to cause harm. Consistent with the predictions from economics, social psychology, and evolutionary biology, we find that conflict originates from all three triggers. The three triggers differently impact the frequency of conflict, but not the intensity. Also, we find that the frequency and intensity of conflict decrease positive emotions …

Focality And Asymmetry In Multi-Battle Contests, Subhashish M. Chowdhury, Dan Kovenock, David Rojo Arjona, Nathaniel Wilcox

ESI Working Papers

This article examines behavior in two-person constant-sum Colonel Blotto games in which each player maximizes the expected total value of the battlefields won. A lottery contest success function is employed in each battlefield. Recent experimental research on such games provides only partial support for Nash equilibrium behavior. We hypothesize that the salience of battlefields affects strategic behavior (the salient target hypothesis). We present a controlled test of this hypothesis – against Nash predictions – when the sources of salience come from certain asymmetries in either battlefield values or labels (as in Schelling (1960)). In both cases, subjects over-allocate the resource …

Extremism Drives Out Moderation, Bettina Klose, Dan Kovenock

Economics Faculty Articles and Research

This article examines the impact of the distribution of preferences on equilibrium behavior in conflicts modeled as all-pay auctions with identity-dependent externalities. Centrists and radicals are defined using a willingness-to-pay criterion that admits preferences more general than a simple ordering on the line. Extremism, characterized by a higher per capita expenditure by radicals than centrists, may persist and generate higher aggregate expenditure by radicals, even when they are relatively small in number. Our results demonstrate the importance of the institutions of conflict in determining the role of extremism and moderation in economic, political, and social environments.

Unrecognized States: A Theory Of Self-Determination And Foreign Influence, Kristina Buzard, Benjamin A.T. Graham, Ben Horne

Economics - All Scholarship

Unrecognized states are characterized by stagnant or crumbling economies and political instability, often serve as havens for illicit trade, and challenge the territorial sovereignty of recognized states. Their persistence is both intellectually puzzling and normatively problematic, but unrecognized statehood can be a remarkably stable outcome, persisting for decades. Our four-player model reveals that unrecognized statehood emerges as an equilibrium outcome when a patron state is willing and able to persistently invest resources to sustain it. We assess options available to actors in the international community who seek to impose their preferred outcomes in these disputes and find that, although sanctions …

Identifying The Factors That Influence Changes In Aggregate Sentiment Among The Masses: An Analysis Of The Measure Of Consumer Sentiment Through A Conflict Analysis And Resolution Lens, Michael Carl Letamendi

Department of Conflict Resolution Studies Theses and Dissertations

The University of Michigan's Survey Research Center developed a tool to quantify how people feel towards the state of the economy. Dr. George Katona, a psychologist and professor at the University of Michigan developed the Index of Consumer Sentiment (ICS) in the 1940s. As decades of data were collected on aggregate consumer sentiment through the 50s and 60s, a discovery was made. The ICS seemed to indirectly predict the direction of the economy by accurately anticipating aggregate purchasing versus saving decisions. The index is even used today by the U.S. Government to measure consumer confidence and has been noted to …

Cognitive Systems For Revenge And Forgiveness, Michael E. Mccullough, Robert Kurzban, Benjamin A. Tabak

ESI Publications

Minimizing the costs that others impose upon oneself and upon those in whom one has a fitness stake, such as kin and allies, is a key adaptive problem for many organisms. Our ancestors regularly faced such adaptive problems (including homicide, bodily harm, theft, mate poaching, cuckoldry, reputational damage, sexual aggression, and the infliction of these costs on one's offspring, mates, coalition partners, or friends). One solution to this problem is to impose retaliatory costs on an aggressor so that the aggressor and other observers will lower their estimates of the net benefits to be gained from exploiting the retaliator in …

Did I Do That? Group Positioning And Asymmetry In Attributional Bias, Brian Gunia, Brice Corgnet

Economics Faculty Articles and Research

A laboratory experiment examined whether one structural feature of groups—members’ physical positioning—may produce asymmetry in their perceived contribution to a task. In particular, we investigated asymmetry in group members’ (often excessive) claims of credit for collective tasks ("the self-serving attributional bias"). Consistent with the availability account of this bias, group members located in the middle of a group, with easy visual access to their partners’ contributions, demonstrated less bias than outside members (who demonstrated bias consistent with prior research)—but no less satisfaction. Further analyses suggested that these results reflected bias reduction among middle members and did stem from visual availability. …