Continuing Conflict

A relatively small but growing literature in economics examines conflictive activities where agents allocate their resource endowments between wealth production and appropriation. To date, their studies have employed a one period, static game theoretic framework. We propose a methodology to extend this literature to a dynamic setting, modeling continuous conflict over renewable natural resources between two rival groups. Investigating the system’s steady states and dynamics, we find two results of general interest. First, Hirshleifer’s “paradox of power” is self-correcting. Second, if productive activities cause damage to disputed resources, the introduction of a small amount of conflictive activity enhances social welfare.Conflict, Dynamics, Paradox of Power, Renewable Resources

Conflict and Renewable Resources

The economic literature on conflict employs a static game theoretic frame- work developed by Jack Hirshleifer. We extend this literature by explicitly introducing conflict dynamics into the model. Our specific application is based on two stylized facts. First, conflict often arises over scarce renew- able resources, and second those resources often lack well-defined and/or enforceable property rights. Our stylized model features two rival groups, each dependent on a single contested renewable resource. Each period, the groups allocate their members between resource harvesting and resource appropriation (or conflict) in order to maximize their income. This leads to a complex non-linear dynamic interaction between conflict, the two populations, and the resource. The system's steady states are identified and comparative statics are computed. As developed, the model relates most closely to conflict over renewable resources in primitive societies. The system's global dynamics are investigated in simulations calibrated for the historical society of Easter Island. The model's implications for contemporary lesser developed societies are examined.Conflict, Dynamics, Renewable Resources

Corporate Social Responsibility and the Environment: A Theoretical Perspective

We survey the growing theoretical literature on the motives for and welfare effects of corporate greening. We show how both market and political forces are making environmental CSR profitable, and we also discuss morally-motivated or altruistic CSR. Welfare effects of CSR are subtle and situation-contingent, and there is no guarantee that CSR enhances social welfare. We identify numerous areas in which additional theoretical work is needed.corporate social responsibility, environment, self-regulation, preemption, private politics

Environmental Inspection Proclivity and State Manufacturing Growth: The US Experience from the 1990s

In this paper we construct a ranking of states based on their proclivity to inspect facilities for environmental compliance. Our measure utilizes state-level inspections data supplied by the US Environmental Protection Agency. After developing our ranking, we use it to predict state-level growth in manufacturing establishments. In doing so, we find support for the notion that enforcement intensity adversely impacts such growth. Our results offer insight into why existing studies that examine the impact of environmental regulation on location and growth produce inconsistent results.Monitoring and Enforcement, Environmental Regulations, Business Formation Growth

Astroturf: Interest Group Lobbying and Corporate Strategy

We study three corporate nonmarket strategies designed to influence the lobbying behavior of other special interest groups: (1) astroturf, in which the firm covertly subsidizes a group with similiar views to lobby when it normally would not; (2) the bear hug, in which the firm overtly pays a group to alter its lobbying activitives; and (3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision-maker. We show that the decision-maker would benefit by requiring the public disclosure of funds but that the availability of alternative strategies limits the impact of such a policy.

The OMMM Project: Toward a Collaborative Editorial Workflow

The BC Association of Magazine Publishers and Simon Fraser University's Canadian Centre for Studies in Publishing are working on an adaptation of Open Journal Systems (OJS) for publishers of small cultural magazines, a community of users with needs that are very different in a wide variety of ways from the standard groups OJS has traditionally served in scholarly publishing

Dynamic Winner-take-all Conflict

This paper develops a model of dynamic conflict featuring probabilistic winner- take-all outcomes and compares its behavior to a model in which combatants emerge with a share of the conflict spoils. While these two models generate the same behavior in a one-shot game, we find that in a repeated conflict setting the winner-take-all model generates richer dynamics than the dynamics generated by the share model. Differences include outcomes that illustrate the rise and fall of great powers, the endogenous extinction of combatants, and frequent changes in the relative dominance of combatants. The model's behavior is compared to real world military, business and political conflict outcomes.Anarchy, Fog of War, Paradox of Power, Winner-take-all conflict

The Groucho Effect of Uncertain Standards

Consumers are rarely sure of the exact standard that product labels and other certificates of quality represent. We show that any such uncertainty creates a “Groucho effect” in which seeing that a product has a label leads consumers to infer that the standard for the label itself is not very demanding. Label adoption is therefore always less likely to be an equilibrium than without uncertainty over the standard, and if it is an equilibrium it is always less informative than without such uncertainty. The Groucho effect leads to an information externality so better firms are reluctant to adopt labels if worse firms adopt them. Applying the model to eco-labels, we find that industry groups, governments, and NGOs can increase label adoption by publicizing labeling criteria, by encouraging consumers to expect label adoption when there are multiple equilibria, and by setting high standards that are less likely to be devalued by low quality firms.Eco-labels, disclosure, certification, persuasion, standards

Resource scarcity and conflict: An economic analysis

As time passes, renewable resource scarcities are becoming more common throughout the world. There is increasing evidence that these scarcities are a causal factor in civil unrest and violent conflict, especially in developing countries. We present a simple model of renewable resource dynamics, population dynamics and conflict. Conflict is triggered by per capita resource scarcity. We examine the role and nature of conflict on the bio-economic system. We find that conflict is Nature's way of protecting vital renewable resources from human exploitation. Conflict, as modelled, increases the death rate of the human population, damages the resource, and diverts resources away from harvesting the natural resource. These effects speed the return to a peaceful steady state, at the same time however if conflict results in resource destruction it may destabilise the system leading it towards collapse. On the policy front we find that increasing harvesting efficiency, fertility, and preference for the resource all increase system vulnerability to conflict. Policies directed at raising system carrying capacity, increasing resource growth rate increasing birth control all serve to stabilise the system and reduce its vulnerability to conflict

Free trade and arms races: Some thoughts regarding EU-Russian trade

As NATO expands eastward, Russia has expressed growing concerns over what it sees as a threat to its national security. At the same time Russia is transitioning to a market economy, with the aim of becoming a free trade partner with the West. The question of concern to European nations is; how will Russia allocate the wealth it gains from freer trade with the west? Will the new found wealth make Russians feel more confident and secure, allowing for a reallocation of wealth towards consumption goods, or will the newly created wealth be allocated towards a new round of military build up? We examine these questions by modeling for the first time the effect of free trade between two potential political rivals, on their respective accumulation of weapons. Our model includes a rich setup in which utility maximization, the economics of trade and comparative advantage, production of weapons and consumption goods, depreciation of weapons stocks, technological spillover from production to national security, and the accumulation of capital are represented in an infinite horizon setting. The paper adopts a neoclassical two goods model of trade in which each actor specializes in producing the good of its comparative advantage and engages in trade. In the model, each country derives positive utility from consumption and its own stock of weapons. The impact of the foreign country`s weapons stock on the home country`s utility is negative (in the case of rivals). At each point in time, each actor chooses how to allocate its resources between the production of consumption goods and defense expenditures. Applying dynamic optimization, we find that whether free trade leads to a rise or a decline in each country`s stock of weapons relative to no trade depends on the relative marginal utilities of the consumption goods and weapons. The implications of these results to the trade and conflict debate are considere