On the escalation and de-escalation of conflict

We introduce three variations of the Hirshleifer-Skaperdas conflict game to study experimentally
the effects of post-conflict behavior and repeated interaction on the allocation of effort between
production and appropriation. Without repeated interaction, destruction of resources by defeated
players can lead to lower appropriative efforts and higher overall efficiency. With repeated
interaction, appropriative efforts are considerably reduced because some groups manage to avoid
fighting altogether, often after substantial initial conflict. To attain peace, players must first engage
in costly signaling by making themselves vulnerable and by forgoing the possibility to appropriate
the resources of defeated opponents.