A Game Theoretical Approach to Political Polarization and Social Conflict.

I present a Politico-economic model of international trade in order to analyze how changes in objective parameters of the economy may alter the probability of different political equlibria. I use the method of Stability Sets proposed by John Harsanyi and Reinhardt Selten (Harsanyi and Selten, 1988) in order to analyze the relative probability of two possible equilibria in the model when relative prices, between manufacture and agricultural goods, change. I distinguish those two equilibria of the model with the adjectives polarized and moderated and argue that the increase in the relative probability of the polarized equilibrium increases the probability of social conflict. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]