Fight or Flight: Endogenous Timing in Conflicts

CentER Discussion Paper Series No. 2018-052

55 Pages Posted: 3 Jan 2019

See all articles by Boris van Leeuwen

Boris van Leeuwen

Tilburg University - Department of Economics

Theo Offerman

University of Amsterdam - Faculty of Economics & Econometrics (FEE)

Jeroen van de Ven

University of Amsterdam; Tinbergen Institute

Date Written: December 18, 2018

Abstract

We study a dynamic game in which players compete for a prize. In a waiting game with two-sided private information about strength levels, players choose between fighting, fleeing, or waiting. Players earn a “deterrence value” on top of the prize if their opponent escapes without a battle. We show that this value is a key determinant of the type of equilibrium. For intermediate values, sorting takes place with weaker and more loss averse players fleeing before others fight. Time then helps to reduce battles. In an experiment, we find support for the key theoretical predictions, and document suboptimal predatory fighting.

Keywords: fight-or-flight, contest, sorting, loss aversion, theory, experiment

JEL Classification: D74, D82, C92

Suggested Citation

van Leeuwen, Boris and Offerman, Theo and van de Ven, Jeroen, Fight or Flight: Endogenous Timing in Conflicts (December 18, 2018). CentER Discussion Paper Series No. 2018-052. Available at SSRN: https://ssrn.com/abstract=3303241 or http://dx.doi.org/10.2139/ssrn.3303241

Boris Van Leeuwen (Contact Author)

Tilburg University - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Theo Offerman

University of Amsterdam - Faculty of Economics & Econometrics (FEE) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4294 (Phone)
+31 20 525 5283 (Fax)

Jeroen Van de Ven

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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