SLEEPING WITH THE ENEMY: THE ECONOMIC COST OF INTERNAL ENVIRONMENTAL CONFLICTS |
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| Authors: | TODD L CHERRY STEPHEN J COTTEN |
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| Institution: | Cherry: Professor of Economics, Department of Economics, Appalachian State University, Boone, NC 28608‐2051. Phone 828‐262‐6081, Fax 828‐262‐6105, E‐mail cherrytl@appstate.edu |
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| Abstract: | This paper extends the literature on collective rent‐seeking by introducing the possibility that a competing group may be a subset of another. We develop a model that incorporates the potential for some individuals to be party of both sides of a conflict, which creates interdependence of payoffs. Results indicate that strategic individual behavior, and the resulting rent dissipation, is affected by the relative size of the groups. We conduct an experimental test of the model and find that observed laboratory behavior corresponds well with the game‐theoretic comparative‐static predictions. (JEL C72, C9, Q5, D74) |
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