After the war: An experimental study of post-conflict behavior

Most models of conflict concentrate on how players allocate resources between productive and fighting efforts. After a conflict, the winner is assumed to take control of all the resources of the loser. In this paper we show experimentally that this simplification misses an important component of a conflict, namely the reaction of the defeated player. We find that, if given the choice to destroy some of their resources, many defeated players prefer to do so rather than let the winner take any of it. Given this behavior, incentives to invest in weapons as opposed to production change and in some cases lower levels of conflict are achieved. Furthermore in settings with repeated interaction, the behavior of players in post-conflict stages can serve as a form of costly communication which enables players to reach a peaceful outcome in the future.