When Parity Promotes Peace: Resolving Conflict between Asymmetric Agents
33 Pages Posted: 13 Jun 2013 Last revised: 25 Jun 2014
Date Written: June 12, 2013
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: Suggested Citation