When Parity Promotes Peace: Resolving Conflict between Asymmetric Agents

33 Pages Posted: 13 Jun 2013 Last revised: 25 Jun 2014

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: June 12, 2013

Abstract

Due to the high costs of conflict both in theory and practice, we examine and experimentally test the conditions under which conflict between asymmetric agents can be resolved. 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 fair 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, asymmetries, conflict resolution, experiments

JEL Classification: C72, C91, D72, D74

Suggested Citation

Kimbrough, Erik O. and Sheremeta, Roman M. and Shields, Timothy W., When Parity Promotes Peace: Resolving Conflict between Asymmetric Agents (June 12, 2013). Journal of Economic Behavior and Organization, 99 (2014) 96–108. Available at SSRN: https://ssrn.com/abstract=2278125 or http://dx.doi.org/10.2139/ssrn.2278125

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

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