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Economics of Governance

, Volume 7, Issue 1, pp 3–29 | Cite as

When does universal peace prevail? Secession and group formation in conflict

  • Francis Bloch
  • Santiago Sánchez-Pagés
  • Raphaël Soubeyran
Article

Abstract.

This paper analyzes secession and group formation in the general model of contests due to Esteban and Ray (1999). This model encompasses as special cases rent seeking contests and policy conflicts, where agents lobby over the choice of a policy in a one-dimensional policy space. We show that in both models the grand coalition is the efficient coalition structure and agents are always better off in the grand coalition than in a contest among singletons. Individual agents (in the rent seeking contest) and extremists (in the policy conflict) only have an incentive to secede when they anticipate that their secession will not be followed by additional secessions. Incentives to secede are lower when agents cooperate inside groups. The grand coalition emerges as the unique subgame perfect equilibrium outcome of a sequential game of coalition formation in rent seeking contests.

Keywords:

Secession group formation rent seeking contests policy conflicts 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2006

Authors and Affiliations

  • Francis Bloch
    • 1
  • Santiago Sánchez-Pagés
    • 2
  • Raphaël Soubeyran
    • 3
  1. 1.Université de la Méditerranée and GREQAMMarseille
  2. 2.Economics University of EdinburghEdinburghUK
  3. 3.GREQAMLes MillesFrance

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