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http://ssrn.com/abstract=2141620
 
 

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Why Can’t We Be Friends? Entitlements and the Costs of Conflict


Erik O. Kimbrough


Simon Fraser University

Roman M. Sheremeta


Case Western Reserve University; Case Western Reserve University

January 28, 2014

Journal of Peace Research, Forthcoming

Abstract:     
We design an experiment to explore the impact of earned entitlements on the frequency and intensity of conflicts in a two-stage conflict game where players may attempt to use non-binding side-payments to avoid conflict. In this game, Proposers make offers and Responders decide simultaneously whether to accept the offers and whether to engage in a conflict. A simple theoretical analysis suggests that Proposers should never offer side-payments because Responders should always accept them and then still choose to enter conflict; however, our experiment reveals that some individuals use this non-binding mechanism to avoid conflict. Moreover, when subjects earn their roles (Proposer or Responder), conflicts are 44% more likely to be avoided than when roles are assigned randomly. Earned entitlements impact behavior in three important ways: (1) Proposers who have earned their position persistently make larger offers; (2) larger offers lead to a lower probability of conflict, but (3) Proposers whose offers do not lead to conflict resolution respond spitefully with greater conflict expenditure. Hence, with earned rights, the positive welfare effects of reduced conflict frequency are offset by higher conflict intensity. This result differs from previous experimental evidence from ultimatum games in which earned entitlements tend to encourage agreement and increase welfare; thus, our findings highlight the important consequences of endogenizing the costs of conflict. Our analysis suggests that earned entitlements alter behavior by influencing the beliefs of Proposers about the willingness of Responders to accept a peaceful resolution. As a result, these Proposers make persistent high offers, and when their beliefs are disappointed by a Responder’s decision to accept a side-payment and still enter conflict, they retaliate.

Number of Pages in PDF File: 32

Keywords: contests, conflict resolution, side-payments, entitlements, experiments

JEL Classification: C72, C91, D72

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Date posted: September 5, 2012 ; Last revised: January 29, 2014

Suggested Citation

Kimbrough, Erik O. and Sheremeta, Roman M., Why Can’t We Be Friends? Entitlements and the Costs of Conflict (January 28, 2014). Journal of Peace Research, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2141620 or http://dx.doi.org/10.2139/ssrn.2141620

Contact Information

Erik O. Kimbrough
Simon Fraser University ( email )
8888 University Drive
Burnaby, BC
Canada
HOME PAGE: http://https://sites.google.com/site/erikkimbrough/
Roman M. Sheremeta (Contact Author)
Case Western Reserve University ( email )
10900 Euclid Ave.
Cleveland, OH 44106
United States
Case Western Reserve University ( email )
Cleveland, CA 44106
United States
(216) 368-4271 (Phone)
HOME PAGE: http://sites.google.com/site/romansheremeta/
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