Vendettas

Friedel Bolle, Jonathan H W Tan, Daniel Zizzo

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)93-130
JournalAmerican Economic Journal: Microeconomics
Volume6
Issue number2
DOIs
Publication statusPublished - 2014

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