Why Can’t We Be Friends? Entitlements, Bargaining, and Conflict

25 Pages Posted: 10 Jun 2012

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

Date Written: May 26, 2012

Abstract

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.

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

JEL Classification: C72, C91, D72

Suggested Citation

Kimbrough, Erik O. and Sheremeta, Roman M., Why Can’t We Be Friends? Entitlements, Bargaining, and Conflict (May 26, 2012). Available at SSRN: https://ssrn.com/abstract=2080410 or http://dx.doi.org/10.2139/ssrn.2080410

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

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