Continuing Conflict and Stalemate: A note

This note is about the possibility of a stalemate in a continuing conflict. Following the prevailing economic literature on the topic, under some assumptions, the outcome of a conflict can be described in two ways: (i) a predetermined split of the contested output (ii) a winner-take-all contest where the winning agent is capable to grab all the contested stake. By contrast, in reality many disputes do not have a clear or a definite outcome. A stalemate can end the conflict with the result of a draw. To allow for a stalemate some formal modifications to the classical Hirshleifer's model of conflict are needed. In particular, since the cornerstone of the economic literature on conflict is the Contest Success Function the possibility of a stalemate can be captured through a modified form of the CSF as axiomatized by Blavatskyy (2004). When a stalemate can emerge, results show that the scenario exhibits a higher degree of violence.Conflict

The Impact of International Economic Sanctions on Trade An empirical Analysis

International economic sanctions appear to be a common and recurring feature of political interactions between states. In particular, the United States is the country which has most frequently applied negative economic sanctions after World War II. In a parallel way, several measures, imposed by a multilateral organisation like the United Nations have taken place in recent years. This paper provides, through a gravity model approach, an estimation of the impact of economic negative sanctions on international trade. First, the study reports panel gravity estimates of bilateral trade between the U.S. and 49 target countries over the period 1960-2000, inclusive. The results show that extensive and comprehensive sanctions have a large negative impact on bilateral trade, while this is not the case for limited and moderate sanctions. A second estimation focuses on the impact of unilateral U.S. sanctions on bilateral trade volume between target countries and the other G-7 countries over the same period. The results show that unilateral extensive sanctions have a large negative impact, while limited and moderate ones induce a slight positive effect on other G-7 countries bilateral trade. Thus, in the first case the hypothesis of negative ‘network effects’ is confirmed, while in the latter the sanctions- busting argument should be defended. In both estimations, however, multilateral sanctions demonstrate a large negative impact on trade flows.International negative sanctions, international trade, gravity model

A Very Simple Model of Conflict with Asymmetric Evaluations and Institutional Constraint

This paper considers a partial equilibrium model of conflict where two asymmetric, rational and risk-neutral opponents conflict in order to appropriate a positive fraction of a stake. An institutional constraint is modelled through an exogenously fixed element as a feature of a modified Contest Success Function. However, this very simple model shows that even if conflicting agents are willing to commit themselves to ease the conflict joining an institutional setting they do not ‘disarm’. The findings of the model show that: (a) both agents prefer to settle under an institutional constraint if and only if an exogenous institutional fee is fixed under a critical value; (b) the critical value of the institutional fee is directly related to the evaluation of the stake each agent does retain; (c) the agents with a higher evaluation of the stake has a higher willingness to settle.Conflict, asymmetric evaluations, contest success function, institutional constraint

Should We Set the Market Free? Some Notes on International Economic Sanctions

International Political economy, International economic sanctions, international trade

A Trade Institution as a Peaceful Institution?

Recent studies emphasize the occurrence of conflict as a rational economic activity as well as production and exchange. Agents are assumed to divide their efforts into fighting and productive activities, or as commonly denoted in ^Qguns^R and ^Qbutter^R. This paper does try to go beyond this ^Qmanichean^R idea assuming the Boulding^Rs concept of ^Qintegrative system^R. In particular, the paper investigates whether a trade institution committed to free and fair trade could foster ^Qpeaceful^R benefits for member countries. The analysis, produced in a very simplified world, counts as a founding pillar the Contest Success Function. The results of the model suggest that in an institutionalized scenario agents gain more both in terms of economic utility and in terms of peace than in ^Qcontinuing conflict^R and ^Qobstructed trade^R scenarios.Contest Success Function, Conflict, international Trade Institution.

International Relative Prices and Civil Wars in Sub-Saharan Africa. Theory and Evidence over the period (1995-2006)

This paper presents first a theoretical model of conflict between two agents characterized by a two-sector economy. In a contested sector two agents struggle to appropriate the maximum possible fraction of a contestable output. In an uncontested sector, they hold secure property rights over the production of some goods. Agents split their resource endowment between ‘butter’, ‘guns’ and ‘ice-cream’. Eventually, tradable goods made of butter and ice-cream produced by conflicting parties are both sold to the Rest of the world. Therefore, the opportunity cost of conflict depends also on relative profitability of contested and uncontested production. In particular, productivity of uncontested production and profitability of contested sectors are countervailing forces. The empirical section focused on a panel of Sub-Saharan African countries for the period 1995-2006. Results are not fully conclusive. However, there is robust evidence that prices of manufactures (interpreted as the uncontested ice-cream) are negatively associated with the likelihood of a civil war. Eventually, international price of manufactures is also associated with a higher GDP per capita growth rate. The concluding remark seems to be that an increase in world prices of manufactures would make civil wars less likely.Theoretical model of conflict, Civil war, resource curse, butter guns and ice-cream, structure of the economy, commodity prices, MUV, panel probit analysis

Continuing Conflict and Stalemate: A Note

This note is about the possibility of a stalemate in a continuing conflict. Following the prevailing economic literature on the topic, under some assumptions, the outcome of a conflict can be described in two ways: (i) a predetermined split of a contested output; (ii) a winner-take-all contest where the winning agent is capable to grab all the contested stake. By contrast, in reality many disputes do not have a clear or a definite outcome. A stalemate can end the conflict with the result of a draw. To allow for a stalemate, some formal modifications to the classical Hirshleifer’s model of conflict are needed. In particular, the possibility of a stalemate can be captured through a modified form of the Contest Success Function as axiomatized by Blavatskyy (2004). Under the possibility of a stalemate, the scenario exhibits a higher level of ‘guns’ than Hirshleifer’s classical model. At the same time, it also exhibits a lower degree of entropy.Conflict; Stalemate; ‘Butter’; ‘Guns’; Hirshleifer; Entropy; Violence

THE Economics of Match-Fixing

The phenomenon of match-fixing does constitute a constant element of sport contests. This paper presents a simple formal model in order to explain it. The intuition behind is that an asymmetry in the evaluation of the stake is the key factor leading to match-fixing. In sum, this paper considers a partial equilibrium model of contest where two asymmetric, rational and risk-neutral opponents evaluate differently a contested stake. Differently from common contest models, agents have the option of choosing a second instrument to affect the outcome of the contest. The second instrument is assumed to capture positive investments in ‘contest management’ – namely efforts paving the way for a match-fixing. In particular, it will be demonstrated that, under some conditions, an asymmetry in the evaluation of the stake can lead to a concession from one agent to the other and then to a match-fixing. Eventually the intuitions and results of the model will be applied to make a comparison between the FIFA World Cup and the UEFA Champions League tournaments.Contest; Football; Sport Contest; Contest Management; Match-Fixing; Asymmetry in evaluation; Concession; FIFA; UEFA; CHampions League; World Cup

Crime and Sport Participation in Itay: Evidence from Panel Data Regional Analysis over the Period 1997-2003.\

What is the broad impact of sport participation and sport activities in a society? The first aim of this paper is tackling this crucial point by studying whether or not there is a relationship between sport participation and crime. A panel dataset have been constructed for the twenty Italian regions over the period 1997-2003. The impact of spot participation on different type of crimes has been studied. Results show that: (i) there is a robust negative association between sport participation and property crime; (ii) There is a robust negative association between sport participation and juvenile crime; (iii) There is a positive association between sport participation and violent crime, but it is only weakly significant.Sport participation, relational goods, crime

THE ORGANIZATION AND ECONOMICS OF ITALIAN SERIE A: A BRIEF OVERALL VIEW

Introduction – 1. The Institutions of Italian Football – 2. Ownership and listing of Italian Serie A Teams – 3. Management of stadia – 4. Some Economics of Italian Football League – 5. Costs out of control. Financial fragility of Italian teams – Conclusions – ReferencesCalcio, Serie A, sport institutions