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Why Can’t We Be Friends? Entitlements, bargaining, and conflict

  • Erik O. Kimbrough


    (Department of Economics, Simon Fraser University, Canada)

  • Roman M. Sheremeta

    (Argyros School of Business and Economics, Chapman University, USA)

We design an experiment to explore the impact of earned entitlements on the frequency and intensity of conflicts in a two-stage bargaining and conflict game with side-payments. In this game, residents (Proposers) make side-payment offers and contestants (Responders) decide whether to accept the offers and whether to engage in a conflict. When subjects earn their roles, conflicts are 44% more likely to be avoided than when roles are assigned randomly. Earned rights impact behavior in three important ways: (1) residents who have earned their position persistently offer larger side-payments; (2) larger offers lead to a lower probability of conflict, but (3) residents whose offers do not lead to conflict resolution respond spitefully and exhibit greater conflict expenditure. Hence, with earned rights, the positive welfare effects of reduced conflict frequency are offset by higher conflict intensity.

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Paper provided by Chapman University, Economic Science Institute in its series Working Papers with number 12-16.

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Length: 30 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:chu:wpaper:12-16
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  1. Roman M. Sheremeta & Jingjing Zhang, 2009. "Can Groups Solve the Problem of Overbidding in Contests?," Department of Economics Working Papers 2009-05, McMaster University.
  2. Michelle R Garfinkel & Stergios Skaperdas, 2001. "Conflict Without Misperceptions or Incomplete Information: How the Future Matters," Levine's Working Paper Archive 563824000000000011, David K. Levine.
  3. Roman M. Sheremeta, 2009. "Experimental Comparison of Multi-Stage and One-Stage Contests," Working Papers 09-04, Chapman University, Economic Science Institute.
  4. Joan Mª Esteban & József Sákovics, 2015. "A Theory of Agreements in the Shadow of Conflict," Working Papers 255, Barcelona Graduate School of Economics.
  5. Kimbrough, Erik O. & Smith, Vernon L. & Wilson, Bart J., 2010. "Exchange, theft, and the social formation of property," Journal of Economic Behavior & Organization, Elsevier, vol. 74(3), pages 206-229, June.
  6. Shakun D. Mago & Roman Sheremeta & Andrew Yates, 2010. "Best-of-Three Contests: Experimental Evidence," Working Papers 10-24, Chapman University, Economic Science Institute.
  7. Laura Schechter, 2007. "Theft, Gift-Giving, and Trustworthiness: Honesty Is Its Own Reward in Rural Paraguay," American Economic Review, American Economic Association, vol. 97(5), pages 1560-1582, December.
  8. Mago, Shakun & Samak, Anya & Sheremeta, Roman, 2013. "Facing Your Opponents: Social Identification and Information Feedback in Contests," MPRA Paper 47029, University Library of Munich, Germany.
  9. Simon Gächter & Arno Riedl, 2005. "Moral Property Rights in Bargaining with Infeasible Claims," Management Science, INFORMS, vol. 51(2), pages 249-263, February.
  10. Roman M. Sheremeta, 2009. "Expenditures and Information Disclosure in Two- Stage Political Contests," Working Papers 09-10, Chapman University, Economic Science Institute.
  11. Catherine Hafer, 2006. "On the Origins of Property Rights: Conflict and Productionin the State of Nature," Review of Economic Studies, Oxford University Press, vol. 73(1), pages 119-143.
  12. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
  13. Anbarci, Nejat & Skaperdas, Stergios & Syropoulos, Constantinos, 2002. "Comparing Bargaining Solutions in the Shadow of Conflict: How Norms against Threats Can Have Real Effects," Journal of Economic Theory, Elsevier, vol. 106(1), pages 1-16, September.
  14. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
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  16. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
  17. Erik O. Kimbrough & Roman M. Sheremeta, 2012. "Side-Payments and the Costs of Conflict," Working Papers 12-01, Chapman University, Economic Science Institute.
  18. Oxoby, Robert J. & Spraggon, John, 2008. "Mine and yours: Property rights in dictator games," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 703-713, March.
  19. Muthoo, Abhinay, 2004. "A model of the origins of basic property rights," Games and Economic Behavior, Elsevier, vol. 49(2), pages 288-312, November.
  20. Roman M. Sheremeta, 2009. "Contest Design: An Experimental Investigation," Working Papers 09-05, Chapman University, Economic Science Institute.
  21. Davis, Douglas D & Reilly, Robert J, 1998. " Do Too Many Cooks Always Spoil the Stew? An Experimental Analysis of Rent-Seeking and the Role of a Strategic Buyer," Public Choice, Springer, vol. 95(1-2), pages 89-115, April.
  22. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  23. Potters, J.J.M. & de Vries, C.G. & van Winden, F.A.A.M., 1998. "An experimental examination of rational rentseeking," Other publications TiSEM 496ad30e-8453-4c83-a5e1-5, Tilburg University, School of Economics and Management.
  24. Subhasish M. Chowdhury & Roman M. Sheremeta & Theodore L. Turocy, 2012. "Overdissipation and Convergence in Rent-seeking Experiments: Cost structure and prize allocation rules," Working Papers 12-13, Chapman University, Economic Science Institute.
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