Cycles of Conflict: An Economic Model

Abstract

Mutual benefits from trust and cooperation not withstanding, inter-group conflict is pervasive. In his study of the Peloponnesian War, Thucydides (2000) traces the origins of conflict as much to fear and distrust as to other factors such as greed and honor. He argues that the Peloponnesian War became inevitable precisely because each side saw war as inevitable and did not want to relinquish the first mover advantage to the other (see also Kagan 2004).1 This view of conflict, sometimes referred as the Hobbesian view or the spiral model, has a clear dynamic implication: if Group A's actions look aggressive, Group B infers that Group A is likely to be aggressive and acts aggressively itself (e.g., Jervis 1976; Kydd 1997). Moreover, unless Group A can fully understand that Group B is acting aggressively purely in response to its own actions, it will take this response as evidence that Group B is aggressive. As a result, conflict spirals.The ubiquity of "conflict spirals" throughout history provides prima facie support for this view. A leading example is ethnic conflict: Horowitz (2000, p. 187) argues "[t]he fear of ethnic domination and suppression is a motivating force for the acquisition of power as an end" and suggests that such fear of ethnic domination was the primary cause of the rise in ethnic violence following the withdrawal of colonial 1 The fear motive for conflict is also referred to as the "Hobbesian trap" or the "security dilemma" (following Schelling 1960). It is modeled by, among others, Baliga and Sjöström (2004) and Chassang and Padro i Miquel (2010). On models of conflict spirals, different from the ones we discuss below, see also Fearon and Laitin (1996) and the references therein.

Conflict dynamics and costs in the Greek Civil War 1946–1949

“…This makes the option for war as a means of appropriating power to look more appealing even if the cost of engagement is multiplied. In Cunningham (2013), indirect negotiations may fail because outside mediators may have ulterior motives beyond just ending the fighting, while Acemoglou and Wolitzky (2014) argue that incomplete information about rival's intentions may lead one side to interpret noisy signals as opportunistic tactics by the other. Thus it may opt to respond in a similar manner and, finally, each side maximizes its own aggression leading to 'conflict spirals'.…”

War and conflict in economics: Theories, applications, and recent trends

“…Much recent work employing dynamic contest models attempts to account for the empirical observation that there are many persistent intergroup conflicts (e.g., Baliga et al, 2011;Rohner et al, 2013;Acemoglu and Wolitzky, 2014;Gul and Pesendorfer, 2012), and this growing theoretical literature has been complemented by observational studies testing competing explanations of conflict persistence (e.g., Augenblick, 2016;Takahashi, 2015).…”

“…While ethnicity is a key contextual factor, this study focuses on the persistence of conflict or the formation of "conflict spirals", and it is shown that coercive peace policies such as external peacekeeping cannot diminish such spirals in the long term. In a more general but analogous setting of competing teams, Acemoglu and Wolitzky (2014) They show that one party becomes more aggressive if its cost decreases or its opponent's cost increases, and that the decision maker is better off when the two parties are closely matched.…”

Just a Big Misunderstanding? Bias and Bayesian Affective Polarization

“…() is more similar to my article in that they model distorted stereotypes of other social groups as based on biased belief formation; however, their model is quite different overall as it does not study dislike. Acemoglu and Wolitzky () show how cycles of conflict between groups can arise due to misperceptions (“good” actions are misperceived as “bad”), causing beliefs about the quality of the other side's character to decline. In their model, actions are binary and a spiral of conflict is a sequence of periods in which both parties play bad actions (as opposed to actions actually becoming more extreme over time).…”