Choice Under the Shadow of Conflict: An Experimental Investigation
29 Pages Posted: 20 May 2015
Date Written: May 18, 2015
Abstract
This study uses a controlled laboratory experiment to analyze the effects of conflict on economic growth and development. Participants were given control of a small, virtual civilization and provided incentives to develop their civilization under various conflict scenarios. The findings suggest that conflict has a negative effect on economic growth (30.40 percent less wealth creation in treatment group). The shadow of conflict is enough to strongly distort resource allocation (36.6 percent less economic investment by participants under the shadow of conflict), causing less economic growth under the shadow of conflict (30.51 percent less wealth accumulation by participants under the shadow of conflict).
Keywords: shadow of conflict, conflict experiment, laboratory experiment
JEL Classification: D74, C91, D13
Suggested Citation: Suggested Citation