Vesperoni, Alberto and Yildizparlak, Anil (2019) 'Inequality and conflict outbreak.', Social choice and welfare., 53 (1). pp. 135-173.
We model conflict as a multi-prize contest which takes place if a minimum number of players (which we interpret as social classes) reject the status-quo prize distribution. In the event of conflict, the status-quo prizes are reshuffled across players depending on their efforts. We first show that, for a broad family of contest models, equilibrium rent dissipation takes the form of a Generalized Gini coefficient of the prize distribution (also tackling the well-known issue of existence of an equilibrium). Secondly, we show that conflict occurs when inequality is low and deprivation (a concept that we define) is high, where these measures are computed with respect to the prize distribution. Thirdly, we find empirical evidence that supports our predictions using an unbalanced panel of 41 high and middle income countries, taking the number of labor strikes per capita as a proxy for the occurrence of conflict and measuring inequality and deprivation with respect to the income distribution.
|Full text:||(AM) Accepted Manuscript|
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|Publisher Web site:||https://doi.org/10.1007/s00355-019-01176-8|
|Publisher statement:||This is a post-peer-review, pre-copyedit version of an article published in Social choice and welfare. The final authenticated version is available online at: https://doi.org/10.1007/s00355-019-01176-8|
|Date accepted:||20 January 2019|
|Date deposited:||25 January 2019|
|Date of first online publication:||01 February 2019|
|Date first made open access:||01 February 2020|
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