Breaking the violence: Attaining peaceful relations in games of conflict

We extend the Hirshleifer-Skaperdas conflict game with a post-contest phase which varies in the type of actions players can engage in once the winner of the contest is determined. Moreover, players have the option to avoid conflict altogether and build a peaceful relation-ship. We show experimentally that the possibility of conditional retaliation by the defeated player is crucial for efficiency improving adaptive behavior of contestants. Our main finding is that conflict levels are considerably reduced mostly because some groups manage to attain peace, often after substantial initial conflict. For the engineering of peace it turns out to be important that players first engage in costly signaling by making themselves vulnerable and by forgoing the possibility to take resources (money) away from their opponent. The behavioral environments of the extended conflict games examined in this paper vary in the opportunities offered in this respect.