Conflicts with Momentum

Abstract

Take the fort, then take the city. In a two-stage, two-party contest, victory in the initial stage can provide an advantage in the final stage. We examine such momentum in conflict scenarios and investigate how valuable it must be to avoid a Pyrrhic victory. Our main finding is that although the elasticity of effort—which we allow to vary between the two stages—does impact the contestants’ effort levels, it has no bearing on the endogenously determined value of momentum itself. Further, rent dissipation in the two-stage conflict is equal across party whether or not an individual obtains first-stage momentum. Thus, momentum helps a player solely by enhancing marginal ability for victory in the second-stage contest. It does not, however, change the player’s net calculus of second-stage contest spending. Such contestable advantage is also found to be more rent-dissipative than innate/uncontestable advantage. Therefore, Pyrrhic victories should be more common for contests with an intermediate stage or stages in which advantages can be earned, ceteris paribus. While intermediate targets appear as useful conflict benchmarks, they dissipate additional expected contest rents. This additional rent-dissipative toll exists even for backward-inductive equilibrium behavior in a complete information setting. Whereas the quagmire theory suggests parties can become involved in problematic conflicts due to incomplete information, the present paper finds that the setting of conflict—namely, contestable intermediate advantage—can alternatively generate rent-dissipative tolls. Similarly, contestable advantage can lead parties to optimally forego contest participation (i.e., if conflict parameters do not meet the participation constraint). This is in contrast to a one-stage simultaneous contest with second-stage parametric values of the present contest.

Environmental Status Goods and Market-Based Conservation: An Arm of Ostrom’s Polycentric Approach?

“…There is substantial empirical evidence that positional concerns influence consumption behavior (see, e.g., Luttmer [16]; Heffetz [18]; Kosicki [19]; 20 Easterlin [20]; Clark and Oswald [21]; Kagel, Kim, and Moser [22]; Oswald [23]; Sanders [24]; Damianov and Sanders [25]. Furthermore, Luttmer [16], Easterlin [20] found evidence that positional spending contests lead to large welfare losses due to the imposition of external (positional spending) costs For related work on rent dissipation from spending contests, see, e.g., Boudreau, Rentschler, and Sanders [26], 27 Boudreau, Sanders, and Shunda [27], or Boudreau et al [28]. In the limit of participation, these costs can erode most of the positional value being conferred by the status contest.…”

A Preface for the Special Issue “Economics of Conflict and Terrorism”

“…The cost of joining a coalition is the anticipated backlash from retaliation. Boudreau, Matthews, Sanders, and Bagchi [7] examined the momentum in conflict, where victory in the initial stage can provide an advantage in the final stage. They discovered that the impact of elasticity of effort on levels of effort has no bearing on the value of momentum itself.…”