The Dynamics of Instability

• 成果类型: Article
• 署名作者: Barilla, Cesar; Goncalves, Duarte
• 署名单位: Columbia University; University of London; University College London
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE5295
• 发表日期: 2024-01-01
• 页码: 365-405
• 关键词: Instability; Social Conflict; stochastic games; C72; C73; C78; D74

摘要

We study a model in which two players with opposing interests try to alter a status quo through instability-generating actions. We show that instability can be used to secure longer-term durable changes, even if it is costly to generate and does not generate short-term gains. In equilibrium, instability generated by a player decreases when the status quo favors them more. Equilibrium always exhibits a region of stable states in which the status quo persists. As players' threat power increases, this region shrinks, ultimately collapsing to a single stable state that is supported via a deterrence mechanism. There is long-run path-dependency and inequity: although instability eventually leads to a stable state, it typically selects the least favorable one for the initially disadvantaged player.