Jiao Qian, Shen Bo, Sun Xiang

Publication:

Journal of Economic Behavior and Organization

Abstract:

Abstract: 【Abstract】 This paper considers a complete bipartite conflict network model with returns to scale technology. We show that the impact of the returns to scale technology on agents’ equilibrium behaviors can be determined by two important factors: the size ratio of two coalitions and the degree of local interdependencies of conflicts. We find an inverted U relationship between the returns to scale technology and (individual and total) equilibrium efforts when two coalitions differ sufficiently in size and the degree of local interdependencies of conflicts is high. Our finding suggests that an increase in the returns to scale technology can be beneficial in the sense that it reduces conflict intensity.

【Keywords】 Conflict network game; Local interdependency; Returns to scale technology; Tullock contest