Amegashie, J. Atsu and Runkel, Marco (2008): The Paradoxes of Revenge in Conflicts.
Download (256Kb) | Preview
We consider a differential game of a conflict between two factions who both have a desire to exact revenge. We show that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of conflicts. Surprisingly, in the open-loop equilibrium, the weaker faction exerts a higher effort when the stronger faction’s military capability increases. This result is not possible in the absence of a desire for revenge. The closed-loop equilibrium is characterized by a self-deterrence effect: Anticipating the future retaliation of the opponent, a faction has an incentive to exert lower effort today. This strengthens the tendency to a stable steady state and paradoxically may decrease the factions’ effort below the levels exerted in the case without revenge. We discuss some applications of our results and also offer an explanation of a puzzling empirical result obtained by Jaeger and Paserman (2007) in their study of the Israeli-Palestinian conflict. We also discuss the implications of revenge-dependent preferences for welfare economics and their strategic value as commitment devices.
|Item Type:||MPRA Paper|
|Original Title:||The Paradoxes of Revenge in Conflicts|
|Keywords:||conflict, commitment, differential game, revenge|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B21 - Microeconomics
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D74 - Conflict; Conflict Resolution; Alliances
|Depositing User:||J. Atsu Amegashie|
|Date Deposited:||12. Mar 2008 00:24|
|Last Modified:||13. Feb 2013 21:11|
References Amegashie, J.A., and Kutsoati, E. (2007). (Non)intervention in Intra-State Conflicts. European Journal of Political Economy 23: 754-767.
Axelrod, R. (1984). The Evolution of Cooperation. Basic Books, New York.
Bester, H., and Konrad, K.A. (2005). Easy Targets and the Timing of Conflict. Journal of Theoretical Politics 17: 199-215.
Bernheim, B.D., and Rangel, A. (2005). Behavioral Public Economics: Welfare and Policy Analysis with Fallible Decision-Makers. In Peter Diamond and Hannu Vartianen (eds.), Institutions and Behavioral Economics, forthcoming.
Bernheim, B.D., and Rangel, A. (2008). Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics. NBER Working Paper No. 13737.
Bernheim, B.D., and Ray, D. (1989). Collective Dynamic Consistency in Repeated Games. Games and Economic Behavior 1: 295-326.
Binmore, K. (1998). Just Playing: Game Theory and the Social Contract II. MIT Press, Cambridge, MA.
Bloom, S.L. (2001). Reflections on the Desire for Revenge. Journal of Emotional Abuse 2: 61-94.
Carlson, L. J. (1995). A Theory of Escalation and International Conflict. Journal of Conflict Resolution 39: 511-34
Carment, D., and Rowlands, D. (1998). Three’s Company: Evaluating Third-Party Intervention in Intrastate Conflict. Journal of Conflict Resolution 42: 572-599.
Carmichael, H., and MacLeod, B. W. (2007). Welfare Economics with Intransitive Revealed Preferences. Journal of Public Economic Theory, forthcoming. Casari, M., and Luini, L. (2006). Peer Punishment in Teams: Emotional or Strategic Choice? Purdue University Economics Working Papers No. 1188.
Chagnon, N. A. (1988). Life Histories, Blood Revenge, and Warfare in a Tribal Population. Science 239: 985 - 992.
Chang, Y-M., Potter, J., and Sanders, S. (2007). War and Peace: Third-Party Intervention in Conflict. European Journal of Political Economy, forthcoming.
Che, Y-K., and Gale, I. (2000). Difference-Form Contests and the Robustness of All-Pay Auctions. Games and Economic Behavior 30: 22-43.
Crawford, V. (1982). A Theory of Disagreement in Bargaining. Econometrica 50: 607- 637
Dockner, E.J., Jorgensen, S., Long, N.V. and Sorger, G. (2000), Differential Games in Economics and Management Science, Cambridge University Press.
Driskill, R.A., and McCafferty, S. (1989). Dynamic Duopoly with Adjustment Costs: A Differential Game Approach. Journal of Economic Theory 49: 324-338.
Elster, J. (1990). Norms of Revenge. Ethics 100: 862-885.
Farrell, J., and Maskin, E. (1989). Renegotiation in Repeated Games. Games and Economic Behavior 1: 327-360. Fearon, J. D. (1994). Domestic Political Audiences and the Escalation of International Disputes. American Political Science Review 88: 577-92.
Fehr, E., and Gachter, S. (2000). Cooperation and Punishment in Public Goods Experiments. American Economic Review 90: 980-994.
Frank, R.H. (1988). Passions Within Reason: The Strategic Role of the Emotions. New York : W. W. Norton, 1988
Garfinkel, M. R., and Skarpedas, S. (2000). Conflict without Misperceptions or Incomplete Information: how the Future Matters. Journal of Conflict Resolution 44: 793-807.
Glaeser, E.L. (2005). The Political Economy of Hatred. Quarterly Journal of Economics 120: 45-86.
Hausken, K. (2008). Whether to Attack a Terrorist's Resource Stock Today or Tomorrow. Games and Economic Behavior, forthcoming.
Hume, D. (1898). An Enquiry Concerning the Principles of Morals. http://www.anselm.edu/homepage/dbanach/Hume-Enquiry%20Concerning%20Morals.htm
Jaeger, D.A., and Paserman, D.M. (2007). The Cycle of Violence? An Empirical Analysis of Fatalities in the Palestinian-Israeli Conflict. American Economic Review, forthcoming.
Juah, T. (2002). Kosovo: War and Revenge. Yale University Press, 2002.
Jun, B., and Vives, X. (2004). Strategic Incentives in Dynamic Duopoly. Journal of Economic Theory 116: 249-281.
Kahneman, D. and Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica 47, 263-291.
Kim, S.H., and Smith, R.H. (1993). Revenge and Conflict Escalation. Negotiation Journal 9: 37-43.
Konrad, K.A., and Kovenock, D. (2005). Equilibrium and Efficiency in the Tug-of-War. CEPR Discussion Paper No. 5205.
Knutson, B. (2004). Sweet Revenge? Science 305: 1246 – 1247.
Martinez-Coll, J. and Hirshleifer, J. (1991). The Limits of Reciprocity. Rationality and Society 3: 35-64.
McAfee, R.P., Mialon, H., and Mialon, S. (2007). Do Sunk Costs Matter? Economic Inquiry, forthcoming.
Nalebuff, B (1986). Brinkmanship and Nuclear Deterrence: the Neutrality of Escalation. Conflict Management and Peace Science 9: 19-30
Nussbaum, M. (1999). Sex and Social Justice. Oxford University Press.
Orth, U. (2004). Does Perpetrator Punishment Satisfy Victims’ Feelings of Revenge? Aggressive Behavior 30: 62-70.
Rice, O. (1982). The Hatfields and the McCoys. Lexington: University of Kentucky Press.
Romer, P. (2000). Thinking and Feeling. American Economic Review 90: 439-443.
Schelling, T.C. (1960). The Strategy of Conflict. Cambridge, MA: Harvard University Press.
Siqueira, K. (2003). Conflict and Third-Party Intervention. Defence and Peace Economics 14: 389-400.
Skaperdas, S. (1992). Cooperation, Conflict and Power in the Absence of Property Rights. American Economic Review 82: 720–739.
Stuckless, N., and Goranson, R. (1992). The Vengeance Scale: Development of a Measure of Attitudes toward Revenge. Journal of Social Behavior and Personality 7:25-42.
Suny, R. G. (1993). The Revenge of the Past: Nationalism, Revolution, and the Collapse of the Soviet Union. Stanford University Press.
Wirl, F. (1994). The Dynamics of Lobbying – A Differential Game. Public Choice 80: 307-323.
Wirl, F., and Feichtinger, G. (2002). Intrafamiliar Consumption and Saving under Altruism and Wealth Considerations. Economica 26: 93-111.