Resources for Conflict: Constraint or Wealth?

We investigate the effects of the availability of resources that can be expended in conflict on conflict intensity. We run a between-subject Tullock contest in which we vary the contest budget (from Low to Medium to High), while keeping the Nash equilibrium bid the same and find an inverted-U shaped relationship between resource availability and conflict intensity. We further run a Wealth treatment, in which the budget remains Medium, but a fixed payment – independent of the contest outcome – is provided. The level of conflict in this Wealth and the High treatment are not different, implying a wealth effect through the available resources. We conclude that the resources for conflict can have both a constraint as well as a wealth effect. When initial resources are scarce, then it acts as a constraint. As more resources become available the constraint loosens up and the conflict intensity increases. However, when the resources are abundant, then it is viewed as wealth and conflict intensity decreases. Hence, the availability of additional resources reduces the marginal benefit from wining as well as conflict intensity.