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Savings and predation

Chassang, Sylvain and Padró i Miquel, Gerard (2010) Savings and predation. Journal of the European Economic Association, 8 (2-3). pp. 645-654. ISSN 1542-4766

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Abstract

We contrast the relationship between predation and the savings of its potential victim in two different simple models. In the first model, predation is an exogenous event in which savings are expropriated with some fixed probability. In such a setting, the higher the probability of expropriation the lower are savings. In the second model, we endow the predatory agent with a decision whether to expropriate or to devote his efforts to some productive endeavor. In this second model, the (endogenous) probability of expropriation can easily be positively correlated with savings. In addition, we show that predation is more damaging to the savings and utility of the victim in the second model.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=1542-4766&...
Additional Information: © 2010 European Economic Association
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
Sets: Departments > Economics
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 05 Apr 2011 08:37
URL: http://eprints.lse.ac.uk/33862/

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