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Free keywords:
Conflict, contest, alliance, hold-up problem, experiment
Abstract:
Victorious alliances often fi
ght about the spoils of war. We consider experimentally when members of victorious alliances accept a peaceful division of the spoils, and when they fi
ght against each other, and how the inability to commit to a peaceful division affects their effort contributions in their fi
ght against a common enemy. First, we
find that an asymmetric split of the prize induces a higher likelihood of internal fi
ght and, in turn, reduces the effort contributions in the
fight against a joint enemy. Second, non-binding declarations on how to divide the spoils in case of victory do not help to mitigate the hold-up problem.
