Advertisement

Public Choice

, Volume 146, Issue 3–4, pp 501–520 | Cite as

Self-enforcing norms and efficient non-cooperative collective action in the provision of public goods

  • Kai A. KonradEmail author
  • Wolfgang Leininger
Open Access
Article

Abstract

We show how norms can solve the distributional conflict inside a group in an anarchic environment and yield efficient coordination of collective action in a conflict with an external competitor. The equilibrium of the fully non-cooperative game with finite horizon has two interesting features. First, one of the players assumes a central role that resembles the role of the ‘big-man’ in some primitive stateless societies. Second, the group members’ contributions to collective output and the payments from the big-man to these members seemingly look like reciprocal behavior, even though they are driven by narrowly selfish preferences.

Keywords

Free-riding Collective action Anarchy Distributional conflict War Norms Big-man 

JEL Classification

D72 D74 H11 H41 

References

  1. Acemoglu, D., Robinson, J. A., & Verdier, T. (2004). Kleptocracy and divide-and-rule: a model of personal rule. Journal of the European Economic Association, 2(2–3), 162–192. CrossRefGoogle Scholar
  2. Alcalde, J., & Dahm, M. (2010). Rent seeking and rent dissipation: a neutrality result. Journal of Public Economics (forthcoming). Google Scholar
  3. Andreoni, J. (1990). Impure altruism and donations to public goods: a theory of warm-glow giving. Economic Journal, 100(401), 464–477. CrossRefGoogle Scholar
  4. Bagnoli, M., & Lipman, B. L. (1989). Provision of public goods—fully implementing the core through private contributions. Review of Economic Studies, 56(4), 583–601. CrossRefGoogle Scholar
  5. Bagwell, L. S., & Bernheim, B. D. (1996). Veblen effects in a theory of conspicuous consumption. American Economic Review, 86(3), 349–373. Google Scholar
  6. Baik, K. H. (1994). Effort levels in contests with asymmetric players. Southern Economic Journal, 61(2), 367–378. CrossRefGoogle Scholar
  7. Baik, K. H. (2005). Endogenous timing and effort levels in two-player asymmetric contests. Mimeo, Sungkyunkwan University. Google Scholar
  8. Baik, K. H., & Shogren, J. F. (1992). Strategic behavior in contests: comment. American Economic Review, 82(1), 359–362. Google Scholar
  9. Barzel, Y. (2000). Property rights and the evolution of the state. Economics of Governance, 1(1), 25–51. Google Scholar
  10. Barzel, Y. (2002). A theory of the state. Cambridge: Cambridge University Press. Google Scholar
  11. Batina, R. G., & Ihori, T. (2005). Public goods, theory and evidence. New York: Springer. Google Scholar
  12. Baye, M. R., Kovenock, D., & de Vries, C. G. (1996). The all-pay auction with complete information. Economic Theory, 8, 291–305. Google Scholar
  13. Benson, B. L. (1988). Legal evolution in primitive societies. Journal of Institutional and Theoretical Economics, 144(5), 772–788. Google Scholar
  14. Benson, B. L. (1989). The spontaneous evolution of commercial law. Southern Economic Journal, 55(3), 644–661. CrossRefGoogle Scholar
  15. Bergstrom, T. C., Blume, L., & Varian, H. (1986). On the private provision of public goods. Journal of Public Economics, 29, 25–49. CrossRefGoogle Scholar
  16. Bénabou, R., & Tirole, J. (2006). Incentives and prosocial behavior. American Economic Review, 96(5), 1652–1979. CrossRefGoogle Scholar
  17. Cornes, R. (1993). Dyke maintenance and other stories: some neglected types of public goods. Quarterly Journal of Economics, 108(1), 259–271. CrossRefGoogle Scholar
  18. Davis, D. D., & Reilly, R. J. (1999). Rent-seeking with non-identical sharing rules: an equilibrium rescued. Public Choice, 100(1–2), 31–38. CrossRefGoogle Scholar
  19. De Meza, D., & Gould, J. R. (1992). The social efficiency of private decisions to enforce property rights. Journal of Political Economy, 100(3), 561–580. CrossRefGoogle Scholar
  20. Elster, J. (1989). The cement of society: a study of social order. Cambridge: Cambridge University Press. CrossRefGoogle Scholar
  21. Esteban, J., & Ray, D. (2001). Collective action and the group size paradox. American Political Science Review, 95(3), 663–672. CrossRefGoogle Scholar
  22. Falkinger, J. (2006). Non-governmental public norm enforcement in large societies. CESifo Working Paper No. 1368 (revised). Google Scholar
  23. Fearon, J. D. (1995). Rationalist explanations for war. International Organization, 49, 379–414. CrossRefGoogle Scholar
  24. Fearon, J. D. (2008). Self-enforcing democracy. Mimeo, Stanford University. Google Scholar
  25. Garfinkel, M. R., & Skaperdas, S. (2007). Economics of conflict, an overview. In T. Sandler & K. Hartley (Eds.), Handbook of defense economics (Vol. 2, pp. 649–710). Google Scholar
  26. Glazer, A. (2002). Allies as rivals: internal and external rent seeking. Journal of Economic Behavior and Organization, 48(2), 155–162. CrossRefGoogle Scholar
  27. Glazer, A., & Konrad, K. A. (1996). A signaling explanation for private charity. American Economic Review, 86, 1019–1028. Google Scholar
  28. Gradstein, M. (2007). Inequality, democracy and the protection of property rights. Economic Journal, 117(516), 252–269. CrossRefGoogle Scholar
  29. Grossman, H. I. (1994). Production, appropriation, and land reform. American Economic Review, 84, 705–712. Google Scholar
  30. Hardin, R. (1995). One for all: the logic of group conflict. Princeton: Princeton University Press. Google Scholar
  31. Hirshleifer, J. (1983). From weakest link to best-shot: the voluntary provision of public goods. Public Choice, 41, 371–386. CrossRefGoogle Scholar
  32. Hirshleifer, J. (1988). The analytics of continuing conflict. Synthese, 76, 201–233. CrossRefGoogle Scholar
  33. Hirshleifer, J. (1994). The dark side of the force. Economic Inquiry, 32, 1–10 (reprinted in: Hirshleifer, J. (2001). The dark side of the force: economic foundations of conflict theory. Cambridge: Cambridge University Press). CrossRefGoogle Scholar
  34. Hirshleifer, J. (1995). Anarchy and its breakdown. Journal of Political Economy, 103, 26–52. CrossRefGoogle Scholar
  35. Holcombe, R. G. (2004). Government: unnecessary but inevitable. The Independent Review, 8(3), 325–342. Google Scholar
  36. Johnsen, D. B. (1986). The formation and protection of property rights among the Southern Kwakiutl Indians. Journal of Legal Studies, 40(1), 41–67. CrossRefGoogle Scholar
  37. Kaplan, T. R., Luski, I., & Wettstein, D. (2003). Innovative activity and sunk cost. International Journal of Industrial Organization, 21(8), 1111–1133. CrossRefGoogle Scholar
  38. Katz, E., & Tokatlidu, J. (1996). Group competition for rents. European Journal of Political Economy, 12(4), 599–607. CrossRefGoogle Scholar
  39. Konrad, K., & Leininger, W. (2007). The generalized Stackelberg equilibrium of the all-pay auction with complete information. Review of Economic Design, 11, 165–174. CrossRefGoogle Scholar
  40. Kurrild-Klitgaard, P. (2002). Opting-out: the constitutional economics of exit. American Journal of Economics and Sociology, 61(1), 123–158. CrossRefGoogle Scholar
  41. Landa, J. T. (1994). Trust, ethnicity, and identity, beyond the new institutional economics of ethnic trading networks, contract law, and gift exchange. Ann Arbor: The University of Michigan Press. Google Scholar
  42. Leeson, P. T. (2006). Efficient anarchy. Public Choice, 130, 41–53. CrossRefGoogle Scholar
  43. Leeson, P. T. (2007a). Trading with bandits. Journal of Law and Economics, 50, 303–321. CrossRefGoogle Scholar
  44. Leeson, P. T. (2007b). An-arrgh-chy: the law and economics of pirate organization. Journal of Political Economy, 115(6), 1049–1094. CrossRefGoogle Scholar
  45. Leeson, P. T. (2008). Coordination without command: stretching the scope of spontaneous order. Public Choice, 135, 67–78. CrossRefGoogle Scholar
  46. Leininger, W. (1993). More efficient rent-seeking—a Münchhausen solution. Public Choice, 75(1), 43–62. CrossRefGoogle Scholar
  47. McGuire, M. C. (1974). Group size, group homogeneity, and the aggregate provision of a public good under Cournot behavior. Public Choice, 18, 107–126. CrossRefGoogle Scholar
  48. McGuire, M. C., & Olson, M. (1996). The economics of autocracy and majority rule: the invisible hand and the use of force. Journal of Economic Literature, 34(1), 72–96. Google Scholar
  49. Müller, H. M., & Wärneryd, K. (2001). Inside versus outside ownership: a political theory of the firm. RAND Journal of Economics, 32(3), 527–541. CrossRefGoogle Scholar
  50. Myerson, R. B. (2008). The autocrat’s credibility problem and foundations of the constitutional state. American Political Science Review, 102(1), 125–139. CrossRefGoogle Scholar
  51. Nitzan, S. (1991). Collective rent dissipation. Economic Journal, 101, 1522–1534. CrossRefGoogle Scholar
  52. Olson, M. (1993). Dictatorship, democracy, and development. American Political Science Review, 87(3), 567–576. CrossRefGoogle Scholar
  53. Oppenheimer, F. (1908). Der Staat. Frankfurt am Main: Literarische Anstalt. Google Scholar
  54. Orenstein, H., Ake, C., Cooper, E., Holzberg, C. S., Krader, L., Kurtz, D. V., Liep, J., Oshima, K., & Wong, D. H. (1980). Asymmetrical reciprocity: a contribution to the theory of political legitimacy [and comments and reply]. Current Anthropology, 21(1), 69–91. CrossRefGoogle Scholar
  55. Powell, B. W., & Stringham, E. P. (2009). Public choice and the economic analysis of anarchy: a survey. Public Choice, 140, 503–538. CrossRefGoogle Scholar
  56. Riker, W. (1966). Federalism. New York: Little Brown. Google Scholar
  57. Sahlins, M. D. (1963). Poor man, rich man, big-man, chief: political types in Melanesia and Polynesia. Comparative Studies in Society and History, 5(3), 285–303. CrossRefGoogle Scholar
  58. Sánchez-Pagés, S., & Straub, S. (2006). The emergence of institutions. Discussion Paper 148, University of Edinburgh. Google Scholar
  59. Shen, L. (2007). When will a dictator be good? Economic Theory, 31(2), 343–366. CrossRefGoogle Scholar
  60. Skaperdas, S. (1992). Cooperation, conflict and power in the absence of property rights. American Economic Review, 82, 720–739. Google Scholar
  61. Skaperdas, S. (2002). Warlord competition. Journal of Peace Research, 39(4), 435–446. CrossRefGoogle Scholar
  62. Slantchev, B. L. (2003). The power to hurt: costly conflict with completely informed states. American Political Science Review, 97(1), 123–133. CrossRefGoogle Scholar
  63. Spolaore, E., & Alesina, A. (2002). War, peace and the size of countries. Mimeo, Brown University. Google Scholar
  64. Stringham, E. (2003). The extralegal development of securities trading in seventeenth-century Amsterdam. The Quarterly Review of Economics and Finance, 43, 321–344. CrossRefGoogle Scholar
  65. Tullock, G. (1972). The edge of the jungle. In G. Tullock (Ed.), Explorations in the theory of anarchy. The Public Choice Society Book and Monograph Series, Blacksburg, VA, USA (pp. 65–75). Reprinted in: E. Stringham (Ed.) (2005). Anarchy, state and public choice. Cheltenham: Edward Elgar. Google Scholar
  66. Wärneryd, K. (1998). Distributional conflict and jurisdictional organization. Journal of Public Economics, 69, 435–450. CrossRefGoogle Scholar

Copyright information

© The Author(s) 2010

Authors and Affiliations

  1. 1.Max Planck Institute for Intellectual Property, Competition an Tax LawMunichGermany
  2. 2.Department of EconomicsUniversity of Dortmund (TU)DortmundGermany

Personalised recommendations