A Model of Conflict, Appropriation and Production in a Two-Sector Economy

22 Pages Posted: 12 Nov 2007

See all articles by Raul Caruso

Raul Caruso

Catholic University of the Sacred Heart of Milan

Date Written: August 2007

Abstract

This paper presents a model of conflict in an economy characterized by two sectors. In a first sector labelled as contested sector two agents struggle in order to appropriate the maximum possible fraction of a contestable output. In a second sector, the uncontested sector, each agent holds secure property rights over the production of some goods. Both agents maximize an income function which can be defined as a function of contributions of both sectors. Results show that the degree of returns in the uncontested sector is a powerful force which countervails the impact of destructive and unproductive interaction in the contested sector.

Keywords: Conflict, Productive and Unproductive Activities, Butter and Guns, Crime, Warlords, Civil War

JEL Classification: D74, D20, F51, H56, O17

Suggested Citation

Caruso, Raul, A Model of Conflict, Appropriation and Production in a Two-Sector Economy (August 2007). Available at SSRN: https://ssrn.com/abstract=1029317 or http://dx.doi.org/10.2139/ssrn.1029317

Raul Caruso (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

20123 Milano
Italy

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