Joan Maria Esteban

On the measurement of polarization

Suppose that the authors are interested in the distribution of a set of characteristics over a population. They study a precise sense in which this distribution can be said to be polarized and provide a theory of measurement. Polarization, as conceptualized here, is closely related to the generation of social tensions, to the possibilities of revolution and revolt, and to the existence of social unrest in general. The authors take special care to distinguish their theory from the theory of inequality measurement. They derive measures of polarization that are easily applicable to distributions of characteristics such as income and wealth. Copyright 1994 by The Econometric Society.

Polarization, Fractionalization and Conflict

This article provides a theoretical framework that distinguishes between the occurrence of conflict and its severity, and clarifies the role of polarization and fractionalization in each of these cases. The analysis helps in ordering the various definitions, and in providing explanations for the empirical observations on the relationship between conflict, on the one hand, and polarization or fractionalization, on the other. The behaviour of players in conflict is described as a game, and equilibrium payoffs to all players are computed. The status quo is characterized by a set of political institutions that channel the different opposing interests and turn them into a collective decision, with a second set of payoffs. Groups rebel against the status quo political institution whenever the latter set of payoffs is dominated by the former. When society is highly polarized, the potential cost of rebellion is extremely high, and this cost may serve as the guarantor of peace. So, in highly polarized societies, the occurrence of open conflict should be rare but its intensity very severe, whenever it happens. On the other hand, highly fractionalized societies are prone to the occurrence of conflict, but its intensity will be moderate. It matters, therefore, whether one studies the intensity of conflict, conditional on conflict breaking out, or the likelihood that conflict actually occurs. Specifically, it is shown that: (i) measures of fractionalization and polarization tend to run in opposite directions, (ii) the onset of conflict critically depends on the political system in place, (iii) the occurrence of conflict and the intensity of conflict also tend to move in opposite directions, (iv) the relationship between polarization or fractionalization and conflict is non-monotonic and (v) the intensity of conflict depends positively on the degree of polarization.

Strategic Mass Killings

We provide a model of conflict and mass killing decisions to identify the key variables and situations that make mass killings more likely to occur. We predict that mass killings are most likely in countries with large amounts of natural resource rents, polarization, institutional constraints regarding rent sharing, and low productivity of labor. The role of resources such as oil, gas, and diamonds and other key determinants of mass killings is confirmed by our empirical results based on country-level as well as ethnic group–level analysis.

Olson vs. Coase: Coalitional worth in conflict

We analyze a model of conflict with endogenous choice of effort, where subsets of the contenders may force the resolution to be sequential: First the alliance fights it out with the rest and – in case they win – later they fight it out among themselves. For three-player games, we find that it will not be in the interest of any two of them to form an alliance. We obtain this result under two different scenarios: equidistant preferences with varying relative strengths, and varying vicinity of preferences with equal distribution of power. We conclude that the commonly made assumption of super-additive coalitional worth is suspect.

Endogenous bargaining power

We present a novel approach to N-person bargaining, based on the idea that the agreement reached in a negotiation is determined by how the direct conflict resulting from disagreement would be resolved. Our basic building block is the disagreement function, which maps each set of feasible outcomes into a disagreement point. Using this function and a weak axiom based on individual rationality we reach a unique solution: the agreement in the shadow of conflict, ASC. This agreement may be construed as the limit of a sequence of partial agreements, each of which is reached as a function of the parties’ relative power. We examine the connection between ASC and asymmetric Nash solutions. We show the connection between the power of the parties embodied in the ASC solution and the bias in the SWF that would select ASC as an asymmetric Nash solution.

Stochastic Dominance and Absolute Risk Aversion

In this paper we propose the infimum of the Arrow-Pratt index of absolute risk aversion as a measure of global risk aversion of a utility function. We then show that, for any given arbitrary pair of distributions, there exists a threshold level of global risk aversion such that all increasing concave utility functions with at least as much global risk aversion would rank the two distributions in the same way. Furthermore, this threshold level is sharp in the sense that, for any lower level of global risk aversion, we can find two utility functions in this class yielding opposite preference relations for the two distributions.