Conflict, settlement, and the shadow of the future

We examine a conflictual setting in which adversaries cannot contract on an enforcement variable (arms) and where the future strategic positions of adversaries are very different when there is open conflict than when there is settlement. We show that, as the future becomes more important in this setting, open conflict becomes more likely than settlement. We demonstrate the theoretical robustness of this finding and test it in a laboratory experiment. As predicted, we find that subjects are more likely to engage in destructive conflict as the future becomes more important.