Klaus Abbink () (CREED, University of Amsterdam) Jordi Brandts () (Institut d'Anàlisi Econòmica (CSIC), Barcelona) Benedikt Herrmann () (University of Nottingham) Henrik Orzen () (University of Nottingham)
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We study how conflict in a contest game is influenced by rival parties being groups and by group members being able to punish each other. Our main motivation stems from the analysis of socio-political conflict. The relevant theoretical prediction in our setting is that conflict expenditures are independent of group size and independent of whether punishment is available or not. We find, first, that our results contradict the independence of groupsize prediction: conflict expenditures of groups are substantially larger than those of individuals, and both are substantially above equilibrium. Towards the end of the experiment material losses in groups are 257% of the predicted level. There is, however, substantial heterogeneity in the investment behaviour of individual group members. Second, allowing group members to punish each other after individual contributions to the contest effort are revealed leads to even larger conflict expenditures. Now material losses are 869% of the equilibrium level and there is much less heterogeneity in individual group members’ investments. These results contrast strongly with those from public goods experiments where punishment enhances efficiency and leads to higher material payoffs.
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Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number
2007-15.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Michelle R. Garfinkel & Stergios Skaperdas, 2006.
"Economics of Conflict: An Overview,"
Working Papers
050623, University of California-Irvine, Department of Economics, revised Sep 2006.
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David Schmidt & Robert Shupp & James M. Walker, 2005.
"Resource Allocation Contests: Experimental Evidence,"
Caepr Working Papers
2006-004, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006.
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Other versions: