Unarmed Peace and the Paradox of Power

We experimentally investigate conditions under which peace can be sustained using a student sample. In particular, we are interested whether (unarmed) peace can be sustained if (armed) conflicts are destructive. Furthermore, we study if unequal resource distributions disrupt peace and lead parties to engage in conflicts.

The experimental conditions differ in the distribution of resources between conflicting parties:

Condition 1: EQUAL: R1 = 100 Tokens; R2 = 100 Tokens
Condition 2: UNEQUAL: R1 = 80Tokens; R2 = 120Tokens

Our design allows us to experimentally investigate the effect of inequality on the emergence and stability of (unarmed) peace

2023-01-18

2023-01-31

Conflict-starting decision
Investments into conflicts

Belief about decision of other party

In the first period of the game, we elicit participants' beliefs about the other party's decision (Conflict-starting decision and investments into conflict).

The experiment will be conducted at the EconLab at the University of Innsbruck. Building on the model by Garfinkel and Syropoulos (2021), we employ an experiment with students in the role of conflicting parties who play the game for 7 rounds. Since we are interested in a one-period setting, we randomly re-match parties after each period, ensuring that the same pair of players will only meet once, therefore impeding reputation-building between players.

We will conduct two experimental conditions. We will run 2 sessions with 24 participants, grouped into clusters of 8 in EQUAL, and three sessions with 14 participants in UNEQUAL, grouped into one cluster.

References:
Garfinkel, M. R. & Syropoulos, C. (2021). Self-enforcing peace agreements that preserve the status quo. Games and Economic Behavior, 130, 148–178.

The experiment will be conducted at the EconLab at the University of Innsbruck. We build our experimental design on the model by Garfinkel and Syropoulos (2021).

The experiment will be divided into five parts:

1 Short Questionnaire
2 Equivalence Equity Task (Kerschbamer, 2015)
3 Loss Aversion Task (Gächter et al., 2022)
4 Trust Game (Berg et al., 1995)
5 Guns and Butter Game - Experimental Variation

The Guns and Butter Game:

The basic structure of the game is as follows: In the beginning of every period, parties are asked to allocate their (treatment-specific) endowments between tournament and production and indicate whether they want to start a tournament or not. Additionally, before the first period, we elicit whether respondents believe that the other party will start a tournament.

If both parties abstain from starting a tournament, their payoffs in the respective period are simply their investments in production. If at least one party starts a tournament, both enter and their payoffs are determined in a destructive winner-take-all tournament, where the investments into conflict determine the probability of winning. The destructiveness of a conflict is 55\%. At the end of the game, one out of the 7 periods will be randomly drawn and participants get paid their payoffs generated in this period.

Given the random assignment of respondents to the experimental groups, we can use multilevel mixed-effect regressions to estimate causal treatment effects. In order to account for dependencies between observations on the session, group, and individual levels, we use mixed-effects models.

We will test the following hypothesis:
Hypothesis 1.
H0: We observe the same shares of conflict initiations in UNEQUAL and EQUAL
H1: We observe higher shares of conflict initiations in UNEQUAL and EQUAL

Hypothesis 2.
H0: We observe the same levels of arming in UNEQUAL and EQUAL
H1: We observe higher levels of arming in UNEQUAL and EQUAL

Yet, we hypothesize that participants’ behavior is not only influenced by treatment variation but also dependent on other economic preferences and personal characteristics which we control for in our secondary analysis. Based on related literature we also aim to verify the following behavior conjectures:

Behavioral Conjecture 1. We expect to observe positive amounts of arming even when participants do not start a conflict in EQUAL

Behavioral Conjecture 2. We expect to observe disadvantaged participants choosing not to start a conflict in UNEQUAL.


References:
Berg, J., Dickhaut, J., & McCabe, K. (1995). Trust, reciprocity, and social history. Games and economic behavior, 10(1), 122–142.
Gächter, S., Johnson, E. J., & Herrmann, A. (2022). Individual-level loss aversion in riskless and risky choices. Theory and Decision, 92(3), 599–624.
Garfinkel, M. R. & Syropoulos, C. (2021). Self-enforcing peace agreements that preserve the status quo. Games and Economic Behavior, 130, 148–178.
Kerschbamer, R. (2015). The geometry of distributional preferences and a non-parametric identification approach: The equality equivalence test. European economic review, 76, 85–103

Randomization is carried out in the experiment by a computer software.

Experimental Session

Yes

6 clusters ́a 8 individuals in EQUAL, 4 clusters ́a 14 individuals in UNEQUAL

104 participants

48 EQUAL
56 UNEQUAL

We performed a power analysis based on the results of a similar experimental study (Kimbrough et al.,2014). In this study, the authors vary low and high endowment-inequality and introduce a device to avoid conflict. They find that the probability of conflict when inequality is low, is on average, 37% lower than when inequality is high (0.40 vs. 0.63, respectively). Assuming a similar effect in the probability of conflict across our treatments, we will need 80 subjects to ensure a power of at least 80% for a significance level of 5%. Reference: Kimbrough, E. O., Sheremeta, R. M., & Shields, T. W. (2014). When parity promotes peace: Resolving conflict between asymmetric agents. Journal of Economic Behavior and Organization, 99, 96–108.