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Economics of Conflict

Paper Session

Saturday, Jan. 5, 2019 8:00 AM - 10:00 AM

Atlanta Marriott Marquis, A708
Hosted By: American Economic Association
  • Chair: Erik Kimbrough, Chapman University

Dynamic Scoring Contests

Brian Roberson
,
Purdue University
Yaroslav Rosokha
,
Purdue University
Stanton Hudja
,
Purdue University

Abstract

In this paper we theoretically and experimentally study a continuous-time contest involving costly search for “scoring” opportunities. Each “scoring” opportunity results in a nonnegative stochastic score, where for each possible “scoring” opportunity the distribution of the stochastic score is common knowledge. The set of “scoring” opportunities may be partitioned into player specific sets, as would be the case in applications such as cyber-espionage. Alternatively, the set of “scoring” opportunities may be common across all players, as would be the case in an innovation contest. In these settings, we examine two possible objectives. Under the first objective, the player with the highest score wins a prize with value equal to their total score but each player pays all of their search costs. Under the second objective, each player’s payoff is equal to their total score minus their total search costs. Across these environments we examine the dynamics of competitive search effort, allowing for variations in the level of feedback.

Identity and the Escalation of Conflict: Theory and Experiment

Roman Sheremeta
,
Case Western Reserve University
Michael Caldara
,
Amazon.com
Michael McBride
,
University of California-Irvine
Matthew McCarter
,
Chapman University

Abstract

We study how group identity affects the escalation of conflict. For this purpose, we introduce a novel identity escalation game and theoretically derive the necessary and sufficient conditions for the escalation and de-escalation of conflict under different strengths of group identity. We test the predictions of our model using a laboratory experiment.

On the Human Consequences of Terrorism

Daniel G. Arce M.
,
University of Texas-Dallas

Abstract

Terrorist attacks are regarded as low probability, highly consequential, events. What, exactly, are the consequential effects of terrorism? In particular, very little is generally known about the effects of terrorism on the immediate victims across attack categories. This paper provides the first-ever cross sectional depiction of terrorism in terms of the death and injury profiles for nine types of terrorist attacks: six types of bombings (confined-space, open-space, suicide, vehicle-delivered, structural collapse and structural fire), mass shootings, combined shootings and explosions, and vehicular rampages. By constructing a composite injury and death profile for each tactic, attacks can be ranked in terms of the number of disability-adjusted lives lost and disability-adjusted life years lost. In addition, the human consequences for terrorism as a whole (on an annual basis) is placed in context relative to the global burden of disease and counterterror expenditures.

Bridge Burning and Escape Routes

Paul Pecorino
,
University of Alabama

Abstract

Thomas Schelling (1966) cites bridge burning as a method of commitment. While such a commitment can increase the chances of success in a conflict, it will generally lower one’s payoff if the conflict is lost. I use a standard rent seeking framework and establish conditions under which this type of commitment can raise a player’s expected payoff. A necessary condition is that the scale parameter in the rent-seeking function exceed 1. The comparative static effects of bridge burning are never favorable at an interior equilibrium, but the strategy can induce the opponent to concede the outcome of the contest. I also analyze the strategy, associated with Sun Tzu, of leaving an escape path open for your enemy. This strategy always works at an interior equilibrium. A special case of the model is used to explain why a group subject to a potential transfer might prefer a less efficient tax system to a more efficient system.
Discussant(s)
Paan Jindapon
,
University of Alabama
Malcolm J. Kass
,
University of Texas-Arlington
Laura V. Zimmermann
,
University of Georgia
Maria Arbatskaya
,
Emory University
JEL Classifications
  • C7 - Game Theory and Bargaining Theory
  • F5 - International Relations, National Security, and International Political Economy