We investigate simultaneous inter- and intra-group conflict in the shadow of within-group power asymmetry and complementarity in members' group-conflict efforts. A more symmetric group faces a higher degree of internal conflict, and might expend more effort in external conflict when the group-conflict effort technology is highly complementary. Depending on the degree of complementarity, the stronger player's relative contribution to external conflict might be higher in a more asymmetric group and, as a result, it is possible for the weaker player to earn a higher payoff. In the absence of any complementarity, the rent-dissipation is non-monotonic with the within-group power asymmetry.
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We appreciate the useful comments from Kyung Hwan Baik, Martin Kolmar, Karl Wärneryd, two anonymous referees, and participants of conferences and seminars at CESifo, Magdeburg, Jadavpur, NCSU, WZB, Perth, UEA, and Sungkyunkwan. J. P. Choi acknowledges support from the Research Foundation of Korea Grant funded by the Korean Government (NRF‐2014S1A5A2A01010660). The usual caveats apply.
© The editors of The Scandinavian Journal of Economics 2015.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics