Suppose two groups, A and B, are involved in joint production, with output R, which is divided between the groups based on Split-the-difference rule. If there is no joint production, groups rely on their wealth, where wealth of group A, WA is greater than the wealth of group B, WB. The groups get utility from their income y, where U'(y)>0 and U''(y)<0. The groups can choose conflict to maximise their net utility.

1. Construct a model to show that if there is no looting, then no matter how unequal the distribution from the joint resource is, there will be no conflict.

2. Do you think introducing looting in your model will lead to conflict even if there is no inequality in the distribution of income from the joint resource? Why?