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Escalation in conflict games: on beliefs and selection

Kai Konrad () and Florian Morath ()

Experimental Economics, 2020, vol. 23, issue 3, No 7, 750-787

Abstract: Abstract We study learning and selection and their implications for possible effort escalation in a simple game of dynamic property rights conflict: a multi-stage contest with random resolve. Accounting for the empirically well-documented heterogeneity of behavioral motives of players in such games turns the interaction into a dynamic game of incomplete information. In contrast to the standard benchmark with complete information, the perfect Bayesian equilibrium features social projection and type-dependent escalation of efforts caused by learning. A corresponding experimental setup provides evidence for type heterogeneity, for belief formation and updating, for self-selection and for escalation of efforts in later stages.

Keywords: Dynamic conflict; Lottery contest; Heterogeneity; Incomplete information; Uncertainty; Escalation; Beliefs; Selection; Learning; Social projection; Experiment (search for similar items in EconPapers)
JEL-codes: C90 D72 D74 D83 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10683-019-09630-1

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