American Economic Review Vol. 104 No. 4 2014

Cycles of Conflict: An Economic Model

Daron Acemoglu¹; Alexander Wolitzky²

¹ MIT Department of Economics, 77 Massachusetts Avenue, Building E18, Room 269D, Cambridge, MA 02142 (e-mail: ) · ² Stanford University, 579 Serra Mall, Room 244, Stanford, CA 94305 (e-mail: )

Abstract

We propose a model of cycles of conflict and distrust. Overlapping generations of agents from two groups sequentially play coordination games under incomplete information about whether the other side consists of bad types who always take bad actions. Good actions may be misperceived as bad and information about past actions is limited. Conflict spirals start as a result of misperceptions but also contain the seeds of their own dissolution: Bayesian agents eventually conclude that the spiral likely started by mistake, and is thus uninformative of the opposing group's type. The agents then experiment with a good action, restarting the cycle.

DOI

10.1257/aer.104.4.1350

Volume

104

Issue

4

Pages

1350-1367

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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