Production, Exchange, and Appropriation in a Hawk-Dove Economy

Document Type

Working Paper

Date of This Version

1-1-1999

Keywords

property rights, Hawk-dove game, immiserizing growth

Abstract

We derive the payoffs of a hawk-dove game based upon production, exchange, and appropriation possibilities. We then link the evolutionary equilibrium of the game to economy-wide fundamentals: production, volume of trade, security of property, welfare, and the extent of hawks in the economy. Within the model we show how hawk-like behavior can be subdued by the potential of mutually beneficial exchange. The model also identifies the conditions under which appropriation possibilities are so large that hawk-like play comes to dominate the economy. We discover, under certain conditions, that an increase in each agent's productivity in its comparative advantage good reduces production and welfare. When increases in productivity result in less production and welfare, the hawk-dove society is plagued by immiserizing growth. The productivity increases which leads to immiserizing growth occur just prior to a productivity cusp that, if reached, vaults the hawk-dove economy to a dramatically improved state.

Working Paper Number

9901

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