Conflict and the Social Contract

We consider social contracts for resolving conflicts between two agents who are uncertain about each other's fighting potential. Applications include international conflict, litigation, and elections. Even though only a peaceful agreement avoids a loss of resources, if this loss is small enough, then any contract must assign a positive probability of conflict. We show how the likelihood of conflict outbreak depends on the distribution of power between the agents and their information about each other

Reputation, social identity, and social conflict

We interpret the social identity literature and examine its economic implications. We model a population of agents from two exogenous and well defined social groups. Agents are randomly matched to play a reduced form bargaining game. We show that this struggle for resources drives a conflict through the rational destruction of surplus. We assume that the population contains both unbiased and biased players. Biased players aggressively discriminate against members of the other social group. The existence and specification of the biased player is motivated by the social identity literature. For unbiased players, group membership has no payoff relevant consequences. We show that the unbiased players can contribute to the conflict by aggressively discriminating and that this behavior is consistent with existing empirical evidence.social identity theory; social fragmentation

By How Much Does Conflict Reduce Financial Development?

Financial development is vulnerable to social conflict. Conflict reduces the demand for domestic currency as a medium of exchange and a store of value. Conflict also leads to poor quality governance, including weak regulation of the financial system, thereby undermining the sustainability of financial institutions. Conflict therefore reduces the social return to financial liberalization and other financial-sector reforms. This paper presents a theoretical model integrating the effects of conflict and financial liberalization, and then tests the model on data for 79 countries. Using an explanatory variable that measures the intensity of conflict (from low to high) the results show that conflict significantly reduces financial development, and that this negative effect increases as conflict intensifies. The paper concludes that conflict reduction is essential if financial reform is to have its full benefit for development

Inflation, Inequality and Social Conflict

This paper presents a political economy model of inflation as a result of social conflict. Agents are heterogeneous in terms of income. Agents' income levels determine their ability to hedge against the effects of inflation. The interaction of heterogeneous cash holdings and preferences over fiscal policy leads to conflict over how to finance government expenditure. The model makes a number of predictions concerning which environments are conducive to the emergence of inflation. Inflation will tend to be higher in countries with higher inequality and with greater pro-rich bias in the political system. Conversely, the use of income tax will be higher in countries with lower inequality and less pro-rich bias. The model also predicts that although inequality and political bias will have an impact on the composition of revenue, it will have no effect on the overall level of government spending (assuming that spending is on public goods only). These results are largely confirmed by the empirical portion of the paper. The paper's novel features are its simplifications at the household level which allow for richer treatment of the income distribution and political process than in the related literature. The paper also gives unequivocal comparative statics results under relatively undemanding assumptions.probabilistic voting, distributional conflict, fiscal policy, inequality, inflation

Social Composition, Social Conflict, and Economic Development

This paper investigates how people subdivided in social groups behave in an economy without property rights. Facing a linear production technology groups follow Markovian strategies for consumption and investment. Additionally, they may spend effort in an appropriation contest. For a symmetric society I show that conflict prevents investment and growth. In a society at peace economic growth may occur. Growth, however, is decreasing in the degree of social fractionalization and smaller than it could be under secure property rights. In an economy populated by social groups of unequal size an asymmetric equilibrium exists. A large majority may behave peacefully although continuously challenged by a predatory minority. In that case the economy either stagnates or grows at a low rate. Growth is decreasing in the size of the predatory minority and its conflict intensity.Africa’s Growth Tragedy, Property Rights, Social Conflict, Fractionalization

Predicting continuous conflict perception with Bayesian Gaussian processes

Conflict is one of the most important phenomena of social life, but it is still largely neglected by the computing community. This work proposes an approach that detects common conversational social signals (loudness, overlapping speech, etc.) and predicts the conflict level perceived by human observers in continuous, non-categorical terms. The proposed regression approach is fully Bayesian and it adopts Automatic Relevance Determination to identify the social signals that influence most the outcome of the prediction. The experiments are performed over the SSPNet Conflict Corpus, a publicly available collection of 1430 clips extracted from televised political debates (roughly 12 hours of material for 138 subjects in total). The results show that it is possible to achieve a correlation close to 0.8 between actual and predicted conflict perception

Conflict Resolution and the Transformation of the Social Contract

[Excerpt] Here is my argument in a nutshell. Beginning more than thirty years ago, the social contract that had governed relations between workers and employers in the United States for the period following World War II began to unravel. Other scholars, most notably Tom Kochan, Harry Katz, and Bob McKersie, have charted the transformation of American industrial relations that began in the 1970s and to a great extent continues today (Kochan et al. 1986). Seeber and I have argued that the emerging social contract that had been produced by the transformation of U.S. industrial relations has had particularly profound consequences for the handling of workplace conflict. To a degree, the rise of alternative dispute resolution (ADR) has been the most obvious manifestation of how workplace conflict is handled under the new social contract. But our research has led us to believe that there is a much deeper, systemic shift that is occurring in the management of workplace conflict. We have focused on a development that moves conflict resolution significantly beyond ADR—we have emphasized the significance of the emergence of so-called integrated conflict management systems (Lipsky et al. 2003, Lipsky and Seeber 2003)