The paradox of power revisited: internal and external conflict

Lopez Cruz, Ivan and Torrens, Gustavo (2019) The paradox of power revisited: internal and external conflict. Economic Theory, 68 (2). pp. 421-460. ISSN 0938-2259 (Print) 1432-0479 (Online)

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This paper develops a two-level model of internal and external conflict in which the paradox of power holds for internal conflict, but not for external conflict. In the model, internal conflict is imbedded in a situation of external conflict. Agents in a group fight over the distribution of resources within the group, but they cooperate to fight against other groups. Agents with low economic productivity have an advantage in the internal conflict game because they face a lower opportunity cost for investments in weapons. However, it is easier for more productive groups to mobilize resources for external conflict, and as a result they have an advantage over less productive groups. The model helps to explain why economically unproductive individuals may enjoy high living standards relative to more productive ones, but more developed groups usually defeat and conquer less developed ones. An extension of the model shows that groups with more unequal distribution of productivity might have an advantage in external conflict. The model can also be extended to study the effects of trade on the intensity of the paradox of power and income distribution within and across groups.
Item Type: Article
Uncontrolled Keywords: Internal and external conflict; Paradox of power
Divisions: Faculty of Arts and Social Sciences
Depositing User: Ivan Lopez Cruz
Date Deposited: 15 Jun 2023 16:12
Last Modified: 15 Jun 2023 16:12

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