American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Vendettas
American Economic Journal: Microeconomics
vol. 6,
no. 2, May 2014
(pp. 93–130)
Abstract
Vendettas occur in many real-world settings where rivals compete for a prize, e.g., winning a competitive promotion or retaining a job, by engaging in aggressive, retaliatory behavior. We present a benchmark experiment where two players have an initial probability of winning a prize. Retaliatory vendettas occur and lead subjects to the worst possible outcomes in 2/3 of cases, counter to self-interest predictions, with large inefficiencies even in the absence of any immediate gain from aggression. Negative emotions are important and interact with the economic setting to produce large social inefficiencies. Allowing cooling off periods reduces aggression.Citation
Bolle, Friedel, Jonathan H. W. Tan, and Daniel John Zizzo. 2014. "Vendettas." American Economic Journal: Microeconomics, 6 (2): 93–130. DOI: 10.1257/mic.6.2.93Additional Materials
JEL Classification
- C72 Noncooperative Games
- D74 Conflict; Conflict Resolution; Alliances
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