IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_2261.html
   My bibliography  Save this paper

The Paradoxes of Revenge in Conflicts

Author

Listed:
  • J. Atsu Amegashie
  • Marco Runkel

Abstract

We consider a differential game of a conflict between two factions who both have a desire to exact revenge. We show that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of conflicts. Surprisingly, in the open-loop equilibrium, the weaker faction exerts a higher effort when the stronger faction’s military capability increases. This result is not possible in the absence of a desire for revenge. The closed-loop equilibrium is characterized by a self-deterrence effect: Anticipating the future retaliation of the opponent, a faction has an incentive to exert lower effort today. This strengthens the tendency to a stable steady state and paradoxically may decrease the factions’ effort below the levels exerted in the case without revenge. We discuss some applications of our results and also offer an explanation of a puzzling empirical result obtained by Jaeger and Paserman (2007) in their study of the Israeli-Palestinian conflict. We also discuss the implications of revenge-dependent preferences for welfare economics and their strategic value as commitment devices.

Suggested Citation

  • J. Atsu Amegashie & Marco Runkel, 2008. "The Paradoxes of Revenge in Conflicts," CESifo Working Paper Series 2261, CESifo.
    • Handle: RePEc:ces:ceswps:_2261
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp2261.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. B. Douglas Bernheim, 2009. "Behavioral Welfare Economics," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 267-319, 04-05.
    2. Paul M. Romer, 2000. "Thinking and Feeling," American Economic Review, American Economic Association, vol. 90(2), pages 439-443, May.
    3. Hausken, Kjell, 2008. "Whether to attack a terrorist's resource stock today or tomorrow," Games and Economic Behavior, Elsevier, vol. 64(2), pages 548-564, November.
    4. Che, Yeon-Koo & Gale, Ian, 2000. "Difference-Form Contests and the Robustness of All-Pay Auctions," Games and Economic Behavior, Elsevier, vol. 30(1), pages 22-43, January.
    5. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-739, September.
    6. David A. Jaeger & M. Daniele Paserman, 2008. "The Cycle of Violence? An Empirical Analysis of Fatalities in the Palestinian-Israeli Conflict," American Economic Review, American Economic Association, vol. 98(4), pages 1591-1604, September.
    7. Helmut Bester & Kai A. Konrad, 2005. "Easy Targets and the Timing of Conflict," Journal of Theoretical Politics, , vol. 17(2), pages 199-215, April.
    8. Konrad, Kai A. & Kovenock, Dan, 2005. "Equilibrium and Efficiency in the Tug-Of-War," Purdue University Economics Working Papers 1177, Purdue University, Department of Economics.
    9. Amegashie, J. Atsu & Kutsoati, Edward, 2007. "(Non)intervention in intra-state conflicts," European Journal of Political Economy, Elsevier, vol. 23(3), pages 754-767, September.
    10. Edward L. Glaeser, 2005. "The Political Economy of Hatred," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 45-86.
    11. Farrell, Joseph & Maskin, Eric, 1989. "Renegotiation in repeated games," Games and Economic Behavior, Elsevier, vol. 1(4), pages 327-360, December.
    12. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 51-104.
    13. B. Douglas Bernheim & Antonio Rangel, 2005. "Behavioral Public Economics: Welfare and Policy Analysis with Non-Standard Decision-Makers," NBER Working Papers 11518, National Bureau of Economic Research, Inc.
    14. Wirl, Franz, 1994. "The Dynamics of Lobbying--A Differential Game," Public Choice, Springer, vol. 80(3-4), pages 307-323, September.
    15. Crawford, Vincent P, 1982. "A Theory of Disagreement in Bargaining," Econometrica, Econometric Society, vol. 50(3), pages 607-637, May.
    16. Garfinkel, M.R. & Skaperdas, S., 2000. "Conflict without Misperceptions or Incomplete Information: how the Future Matters," Papers 99-00-11, California Irvine - School of Social Sciences.
    17. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    18. repec:bla:econom:v:69:y:2002:i:273:p:93-111 is not listed on IDEAS
    19. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    20. R. Preston Mcafee & Hugo M. Mialon & Sue H. Mialon, 2010. "Do Sunk Costs Matter?," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 323-336, April.
    21. Driskill, Robert A. & McCafferty, Stephen, 1989. "Dynamic duopoly with adjustment costs: A differential game approach," Journal of Economic Theory, Elsevier, vol. 49(2), pages 324-338, December.
    22. Kevin Siqueira, 2003. "Conflict and third-party intervention," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 389-400.
    23. Fearon, James D., 1994. "Domestic Political Audiences and the Escalation of International Disputes," American Political Science Review, Cambridge University Press, vol. 88(3), pages 577-592, September.
    24. Casari, Marco & Luini, Luigi, 2006. "Peer Punishment in Teams: Emotional or Strategic Choice?," Purdue University Economics Working Papers 1188, Purdue University, Department of Economics.
    25. Douglas Bernheim, B. & Ray, Debraj, 1989. "Collective dynamic consistency in repeated games," Games and Economic Behavior, Elsevier, vol. 1(4), pages 295-326, December.
    26. Ken Binmore, 1998. "Game Theory and the Social Contract - Vol. 2: Just Playing," MIT Press Books, The MIT Press, edition 1, volume 2, number 0262024446, April.
    27. Jun, Byoung & Vives, Xavier, 2004. "Strategic incentives in dynamic duopoly," Journal of Economic Theory, Elsevier, vol. 116(2), pages 249-281, June.
    28. Juan Carlos Martinez Coll & Jack Hirshleifer, 1991. "The Limits of Reciprocity," Rationality and Society, , vol. 3(1), pages 35-64, January.
    29. Chang, Yang-Ming & Potter, Joel & Sanders, Shane, 2007. "War and peace: Third-party intervention in conflict," European Journal of Political Economy, Elsevier, vol. 23(4), pages 954-974, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gürtler, Oliver & Münster, Johannes, 2013. "Rational self-sabotage," Mathematical Social Sciences, Elsevier, vol. 65(1), pages 1-4.
    2. Boulu-Reshef, Béatrice & Schulhofer-Wohl, Jonah, 2022. "The impact of distance on parochial altruism: An experimental investigation," European Journal of Political Economy, Elsevier, vol. 75(C).
    3. Roman M. Sheremeta, 2013. "Overbidding And Heterogeneous Behavior In Contest Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 27(3), pages 491-514, July.
    4. repec:elg:eechap:15325_3 is not listed on IDEAS
    5. Van Long, Ngo, 2013. "The theory of contests: A unified model and review of the literature," European Journal of Political Economy, Elsevier, vol. 32(C), pages 161-181.
    6. Smith, Adam C. & Houser, Daniel & Leeson, Peter T. & Ostad, Ramin, 2014. "The costs of conflict," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 61-71.
    7. Liang, Liang & Chen, Jingxian & Siqueira, Kevin, 2020. "Revenge or continued attack and defense in defender–attacker conflicts," European Journal of Operational Research, Elsevier, vol. 287(3), pages 1180-1190.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amegashie, J. Atsu & Runkel, Marco, 2008. "The Desire for Revenge and the Dynamics of Conflicts," MPRA Paper 6746, University Library of Munich, Germany.
    2. Chang, Yang-Ming & Sanders, Shane & Walia, Bhavneet, 2015. "The costs of conflict: A choice-theoretic, equilibrium analysis," Economics Letters, Elsevier, vol. 131(C), pages 62-65.
    3. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    4. Jacobs Martin, 2016. "Accounting for Changing Tastes: Approaches to Explaining Unstable Individual Preferences," Review of Economics, De Gruyter, vol. 67(2), pages 121-183, August.
    5. Amegashie, J. Atsu & Kutsoati, Edward, 2007. "(Non)intervention in intra-state conflicts," European Journal of Political Economy, Elsevier, vol. 23(3), pages 754-767, September.
    6. Sugden, Robert, 2021. "Hume's experimental psychology and the idea of erroneous preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 836-848.
    7. Arno Riedl, 2009. "Behavioral and Experimental Economics Can Inform Public Policy: Some Thoughts," CESifo Working Paper Series 2902, CESifo.
    8. B. Douglas Bernheim & Debraj Ray & Şevin Yeltekin, 2015. "Poverty and Self‐Control," Econometrica, Econometric Society, vol. 83(5), pages 1877-1911, September.
    9. Anderton,Charles H. & Carter,John R., 2009. "Principles of Conflict Economics," Cambridge Books, Cambridge University Press, number 9780521875578, December.
    10. Pelosse, Yohan, 2009. "Mediated Contests and Strategic Foundations for Contest Success Functions," MPRA Paper 18664, University Library of Munich, Germany.
    11. Zuleta, Hernando & Villaveces, Marta Juanita & Andonova, Veneta, 2013. "Conflict and negotiation in Colombia: Are pre-donations useful?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 105-117.
    12. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    13. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах [ENDOGENOUS BOUNDARIES AND DISTRIBUTION OF POWER In the Federation]," MPRA Paper 16473, University Library of Munich, Germany.
    14. Daniel Agness & Travis Baseler & Sylvain Chassang & Pascaline Dupas & Erik Snowberg, 2022. "Valuing the Time of the Self-Employed," CESifo Working Paper Series 9567, CESifo.
    15. Jean-Michel Benkert, 2015. "Bilateral trade with loss-averse agents," ECON - Working Papers 188, Department of Economics - University of Zurich, revised Jul 2022.
    16. Markus Haavio & Kaisa Kotakorpi, 2012. "Sin Licenses Revisited," CESifo Working Paper Series 4010, CESifo.
    17. Che-Yuan Liang, 2017. "Optimal inequality behind the veil of ignorance," Theory and Decision, Springer, vol. 83(3), pages 431-455, October.
    18. Amegashie J. Atsu, 2011. "On Third-Party Intervention in Conflicts: An Economist's View," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(2), pages 1-10, April.
    19. Franz Dietrich & Antonios Staras & Robert Sugden, 2021. "Savage’s response to Allais as Broomean reasoning," Journal of Economic Methodology, Taylor & Francis Journals, vol. 28(2), pages 143-164, April.
    20. Ansink, Erik & Weikard, Hans-Peter, 2009. "Contested water rights," European Journal of Political Economy, Elsevier, vol. 25(2), pages 247-260, June.

    More about this item

    Keywords

    conflict; commitment; differential game; revenge;
    All these keywords.

    JEL classification:

    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_2261. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.