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American Economic Journal: Microeconomics (Forthcoming)
Abstract
A continuum of citizens with heterogeneous opportunity costs participates
in a protest with well-defined demands. As long as the
government does not concede, it pays a cost increasing in time
and participation. Citizens who are part of the victory team enjoy
a “veteran reward”. Every equilibrium with protest displays: a
build-up stage during which citizens join the protest but the government
ignores them; a peak at which the government concedes
with positive probability; and a decay stage in which the government
concedes with some density, and citizens continuously drop
out. The set of equilibria is fully described by the peak time.