Savings and predation

Sylvain Chassang, Gerard Padró Miquel

    Research output: Contribution to journalArticlepeer-review

    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.

    Original languageEnglish (US)
    Pages (from-to)645-654
    Number of pages10
    JournalJournal of the European Economic Association
    Volume8
    Issue number2-3
    DOIs
    StatePublished - 2010

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

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