Conflict, settlement, and the shadow of the future

•We examine an incomplete-contracting conflict settings.•We show that open conflict is more likely as the future becomes more important.•We test the theory in a laboratory experiment.•Experimental data confirms our theoretical predictions about the likelihood of conflict. We examine a conflictual se...

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Bibliographic Details
Published inJournal of economic behavior & organization Vol. 105; pp. 75 - 89
Main Authors McBride, Michael, Skaperdas, Stergios
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.09.2014
Elsevier Sequoia S.A
Subjects
Conflict
Conflict resolution
Economic behaviour
Enforcement
Forecasts
Future
Futures
Game theory
Property rights
Settlement
Settlement patterns
Shadow of the future
Strategic behaviour
Strategic management
Studies
War
D74
Settlement
Shadow of the future
Property rights
H56
H1
War
C91
C72
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Summary:•We examine an incomplete-contracting conflict settings.•We show that open conflict is more likely as the future becomes more important.•We test the theory in a laboratory experiment.•Experimental data confirms our theoretical predictions about the likelihood of conflict. We examine a conflictual setting in which adversaries cannot contract on an enforcement variable (arms) and where the future strategic positions of adversaries are very different when there is open conflict than when there is settlement. We show that, as the future becomes more important in this setting, open conflict becomes more likely than settlement. We demonstrate the theoretical robustness of this finding and test it in a laboratory experiment. As predicted, we find that subjects are more likely to engage in destructive conflict as the future becomes more important.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0167-2681
1879-1751
DOI:10.1016/j.jebo.2014.04.023