Bolle, Friedel, Tan, Jonathan H W and Zizzo, Daniel (2014) Vendettas. American Economic Journal: Microeconomics, 6 (2). pp. 93-130. ISSN 1945-7685

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Vendettas occur in many real-world settings where rivals compete for a prize, e.g., winning a competitive promotion or retaining a job, by engaging in aggressive, retaliatory behavior. We present a benchmark experiment where two players have an initial probability of winning a prize. Retaliatory vendettas occur and lead subjects to the worst possible outcomes in 2/3 of cases, counter to self-interest predictions, with large inefficiencies even in the absence of any immediate gain from aggression. Negative emotions are important and interact with the economic setting to produce large social inefficiencies. Allowing cooling off periods reduces aggression.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Julie Frith
Date Deposited: 08 Apr 2013 12:37
Last Modified: 22 Oct 2022 20:30
DOI: 10.1257/mic.6.2.93

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