A Dynamic Model of Conflict and Cooperation

a rapid fall in the expected return from new innovation, which would be a consequence of
imitation by rivals. The increase in return on investment caused by secure property rights is
approximately captured by the effect of a lower depreciation rate in our model.

The problem with using the cooperative solution as a benchmark is that the socially attrac-
tive steady state is not self-enforcing because it does not usually constitute a subgame perfect
(Nash) equilibrium. Nevertheless, agents have to be confronted with a coordination problem
in order to select the most efficient strategy in non-cooperative environments where there
are multiple equilibrium strategies. Accordingly, governments or central agencies can play an
important role in solving the coordination problem stated above. Multiplicity entails that a
window of opportunity is available for an anarchic society in the sense that the equilibrium is
not predetermined only by the stock of durable goods Z0 . A coincidental start abstracts from
all means of communication and trust between agents. But agents have an interest in avoid-
ing the loss caused by aggression and may transcend their lack of confidence to achieve the
Pareto-dominant equilibrium. Benevolent governmental institutions, even when they cannot
enforce full property rights, might be important devices for solving the coordination problem,
such that the society in the best circumstance is able to coordinate on the preferred among
all feasible equilibria.

5 Conclusions

The first message of this paper is that completely aggressive behavior is not necessarily a
rational strategy for an agent in anarchic situations. Rather, every agent will voluntarily and
uniquely choose ‘partial cooperation’, in which each agent devotes his individual resource both
to productive and appropriation at the same time, even though agents act fully rational and
are guided by their self-interest. The primary driving force is the durability of the common-
pool stock in conjunction with the forward looking behavior of agents. These intrinsically
dynamic ingredients induce each contender to behave ‘partially cooperatively’, even without
punishments and threats, unlike Garfinkel (1990). In other words, either if the stock depreci-
ates completely each period or if contenders have myopic foresight, they are less motivated to

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