Economics of the Vanity Secession
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| Year of publication | 2017 |
| Type | Conference abstract |
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| Description | Secession has become the subject of wide discussion among economists in the 21st century. Case of Catalonia, Scotland and Flanders promotes the importance of the political economy of con ict. This paper challenges the conventional discussion of economic and romantic factors of secession. Our unconventional approach is based on the application of game theory. A one-shot sequential secession game is developed to describe the bargaining between two regions. Secession serves as the main threat in the secession game. We have found that even if a country does not want to give a higher degree of autonomy to the region, it might be forced into it by the mere threat of secession. The optimal strategy for secessionist region is not to trigger the debate about a higher degree of autonomy but to require secession. The existence of a constitutional law enables a region to achieve autonomy easier and with lower costs, as it makes the threat of secession more reliable. The implementation of this model on the case of Catalonia reveals that the mere threat of secession is sucient for gaining autonomy. A model can be used to also assess the disintegrational tenses in the current European Union. |
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