Rivalry, Exclusion and Coalitions

We analyze a situation where individuals and coalitions can obtain effective property rights over a resource by means of an exclusion contest. Coalitions face a trade-off when they decide to incorporate new members: Big groups control the resource more likely but individual property rights are more diluted. Under cooperative explotation of the resource the grand coalition is the efficient partition. It is also stable if players are committed to minimize deviators’ payoffs. This is not the case when players play best responses and the conflict technology is sufficently effective with respect to the concavity of the production function: Then there is a strong tendency towards bi-partisan conflicts. Moreover, under non-cooperative exploitation of the resource, conflict may be socially efficient and Pareto dominate free access. JEL classification codes: C71, D62, D74