2 - A Formal Model of Outbidding

Summary

This chapter develops the workhorse model we explore throughout the book. We begin by substantively motivating many aspects of competitive violence: the marketplace has limited resources, violence is costly but increases a group’s share of those resources, opposing violence decreases one’s own share, and others. These components lead us to conclude that a "contest" model is ideal to study the implications of competition. Doing so allows us to recover a central implication from existing theories of outbidding: that more groups imply more total violence output. However, our model concludes that outbidding is a collective effect rather than an individual one. Even as total violence increases in group numbers, the per-group rate of violence drops. These central results are robust to a variety of alternative assumptions.