Reputation, Group Structure and Social Tensions

Year: 2008 HiCN Working Paper No. 040

Social tensions impede social cohesion and public goods provision. They can also be a driving force for more serious conflicts such as civil wars. Surprisingly, however, the emergence of social tensions has only rarely been studied in the literature. In the present contribution a game-theoretic model highlights how reputation concerns and the structure of group cleavages matter for the emergence of social tensions. In particular, the respective effects of fractionalisation, polarisation and segregation are assessed. The predictions of the model can account for recent empirical evidence on ethnic conflicts. The framework can also be applied to the study of social capital and merger failures.