THE STABILITY OF ANARCHY AND BREAKDOWN OF PRODUCTION

In Hirshleifer’s (1995) model for unitary actors, combined fighting/production abruptly breaks down when inter‐group decisiveness of fighting is above a certain value (above one) or income requirements are not met. Accounting for the collective action problem, this article gives the opposite result that fighting/production is stable also for large decisiveness parameters (above one) and strict income requirements for each agent. The stable fighting/production equilibrium gets gradually easier to perturb off balance for high inter‐group decisiveness, high costs of fighting, different fighting efficiencies, and equal group sizes. The equilibrium number of groups that can be sustained decreases in the inter‐group decisiveness and increases in the cost of fighting.