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Elections with International Relations Dominance

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Abstract

Under what conditions is international cooperation possible when the participating countries have incentives to deviate from their promises? With the current problems in the governance of the European Union this important question has new relevance not only for political scientists, but also for economists who have to understand what type of economic cooperation is politically sustainable even in the face of adverse shocks.

Keywords

  • Prime Minister
  • Discount Factor
  • International Cooperation
  • Subgame Perfect Equilibrium
  • Equilibrium Path

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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  • DOI: 10.1007/978-3-319-44582-3_8
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Notes

  1. 1.

    It would be slightly more precise but also more cumbersome to use a subscripts t to make clear that the payoff refers to a specific period t and denote p j, t (c j, t , c k, t ) instead of using the notation in the text.

  2. 2.

    This is a reasonable assumption given that the resources of a country are finite. Moreover, it allows us to use standard results for showing subgame perfection of the equilibria we present and rules out subgame perfect equilibria that are supported by ever-growing contributions.

  3. 3.

    For a proof of this well-known result see for example Theorem 4.2 in Fudenberg and Tirole (1991).

  4. 4.

    However, a common point of critique is that it is not renegotiation proof in the sense of Bernheim and Ray (1989) and Farrell and Maskin (1989).

  5. 5.

    His chance of surviving one more time after that are α 2 in period t + 1 and so on as long as the game follows the equilibrium path.

References

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  • Farrell, J., & Maskin, E. (1989). Renegotiation in repeated games. Games and Economics Behavior 1(4), 327–360.

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  • Fudenberg, D., & Tirole, J. (1991). Game theory. Cambridge, MA: MIT Press.

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  • McGillivray, F., & Smith, A. (2000). Trust and cooperation through agent specific punishment. International Organization 54(04), 809–824.

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  • McGillivray, F., & Smith, A. (2008). Punishing the prince: A theory of interstate relations, political institutions, and leader change. Princeton: Princeton University Press.

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Correspondence to Jan Klingelhöfer .

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Klingelhöfer, J. (2017). Elections with International Relations Dominance. In: Schofield, N., Caballero, G. (eds) State, Institutions and Democracy. Studies in Political Economy. Springer, Cham. https://doi.org/10.1007/978-3-319-44582-3_8

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