Resolving Conflicts by a Random Device

33 Pages Posted: 24 Sep 2011 Last revised: 8 May 2015

See all articles by Erik O. Kimbrough

Erik O. Kimbrough

Chapman University - The George L. Argyros School of Business & Economics

Roman M. Sheremeta

Case Western Reserve University

Timothy W. Shields

Chapman University - George L. Argyros School of Business & Economics; Chapman University - Economic Science Institute

Date Written: November 14, 2012

Abstract

Due to the high costs of conflict both in theory and practice, we examine and experimentally test the conditions under which conflict can be resolved via a random device. We model conflict as a two-agent rent-seeking contest for an indivisible prize. Before conflict arises, both agents may agree to allocate the prize by coin flip to avoid the costs of conflict. In equilibrium, risk-neutral agents with relatively symmetric conflict capabilities agree to resolve the conflict by randomization. However, with sufficiently asymmetric capabilities, conflicts are unavoidable because the stronger agent prefers to fight. The results of the experiment confirm that the availability of the random device partially eliminates conflicts when agents are relatively symmetric; however, the device also reduces conflict between substantially asymmetric agents.

Keywords: contest, conflict resolution, experiments

JEL Classification: C72, C91, D72, D74

Suggested Citation

Kimbrough, Erik O. and Sheremeta, Roman M. and Shields, Timothy W., Resolving Conflicts by a Random Device (November 14, 2012). Journal of Economic Behavior and Organization, Vol. 99, 2014. Available at SSRN: https://ssrn.com/abstract=1932465 or http://dx.doi.org/10.2139/ssrn.1932465

Erik O. Kimbrough

Chapman University - The George L. Argyros School of Business & Economics ( email )

One University Dr
Orange, CA 92866
United States

Roman M. Sheremeta (Contact Author)

Case Western Reserve University ( email )

10900 Euclid Ave.
Cleveland, OH 44106
United States

Timothy W. Shields

Chapman University - George L. Argyros School of Business & Economics ( email )

One University Drive
Orange, CA 92866
United States
714.289.2092 (Phone)

HOME PAGE: http://sites.google.com/site/timothywshields/

Chapman University - Economic Science Institute ( email )

One University Dr.
Orange, CA 92866
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
289
Abstract Views
933
rank
104,337
PlumX Metrics