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Study: When conflict is unproductive
Michele Boldrin and David Levine, both of Washington University in St. Louis, examined the dynamics of conflict and the problem of time consistency. The study authors asked, "If a potential loser agrees to a concession, what guarantees are there that more demands are not then made?"
The study authors said "in the baseline case of common beliefs and identical time preferences, if the size of indivisibility is sufficiently small, conflict can always be avoided by a series of small concessions, with both parties recognizing that there will be additional concessions in the future."
The presence of indivisibilities in the allocation of resources or in the making of concessions can also impede the likelihood of harmonious outcomes, the researchers said.
The authors said appeasement can be a good plan. When choice is possible -- trade should be chosen over conflict.
Boldrin and Levine concluded that a combination of common knowledge and a common rate of time preference allow a potential loser to use small concessions to successfully appease an expected winner.
The findings are published in Economic Inquiry.
Copyright 2009 by United Press International
This news arrived on: 10/15/2009
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