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Social Choice and Welfare

, Volume 44, Issue 4, pp 861–887 | Cite as

Extremism drives out moderation

  • Bettina Klose
  • Dan Kovenock
Article

Abstract

This article examines the impact of the distribution of preferences on equilibrium behavior in conflicts modeled as all-pay auctions with identity-dependent externalities. Centrists and radicals are defined using a willingness-to-pay criterion that admits preferences more general than a simple ordering on the line. Extremism, characterized by a higher per capita expenditure by radicals than centrists, may persist and generate higher aggregate expenditure by radicals, even when they are relatively small in number. Our results demonstrate the importance of the institutions of conflict in determining the role of extremism and moderation in economic, political, and social environments.

Keywords

Conflict All-pay auction Identity-dependent externalities  Radicalism Extremism Contest success function 

JEL Classification

D72 D74 C72 D44 

Notes

Acknowledgments

We have benefited from the helpful comments of Jack Barron, Kai A. Konrad, Wolfgang Leininger, Benny Moldovanu, and seminar participants at Erasmus University Rotterdam, the Max Planck Institute for Tax Law and Public Economics, Purdue University, TU Dortmund, the University of Bonn, the University of California at Riverside, the University of York and the University of Zurich. Earlier versions of this paper were presented at the 2010 Verein für Socialpolitik Congress in Kiel, the 2010 Association for Public Economic Theory Conference in Istanbul, the 2010 European Association for Research in Industrial Economics Annual Conference in Istanbul, the 2010 Society for the Advancement in Economic Theory Conference in Singapore, and the 2011 Conference on Tournaments, Contests, and Relative Performance Evaluation at North Carolina State University. Bettina Klose gratefully acknowledges the financial support of the European Research Council (ERC Advanced Investigator Grant, ESEI-249433) and the Swiss National Science Foundation (SNSF 100014 135257). Dan Kovenock has benefited from the financial support of the Social Science Research Center Berlin (WZB) and the Max Planck Institute for Tax Law and Public Economics in Munich.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  1. 1.University of ZurichZurichSwitzerland
  2. 2.Chapman UniversityOrangeUSA

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