Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2025-11-14
Number: 25-064/VII
Author-Name: Harold Houba
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Roland Iwan Luttens
Author-Workplace-Name: Vrije Universiteit Amsterdam
Title: Equilibrium in the Jungle Edgeworth Box
Abstract: We introduce the Jungle Edgeworth Box economy as an analytical framework to analyze bilateral conflict and examine the interplay between coercion and voluntary exchange. We characterize the set of equilibria in which no further coercion or voluntary exchange ccurs. 
By assuming that coercion precedes voluntary exchange, we characterize the set of quilibria of a Nash Negotiation Game, where coercion is interpreted as a threat from the stronger to the weaker agent. We conclude that the jungle allocation is rarely the correct snapshot of the economy after coercion is over and exchange, facilitated by effective property rights, is about to begin.
Classification-JEL: D61, K11, P48 
Keywords: bilateral conflict, coercion, jungle, barter, Edgeworth box
File-URL: https://papers.tinbergen.nl/25064.pdf
File-Format: application/pdf
File-Size: 492.297 bytes
Handle: RePEc:tin:wpaper:20250064