IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp17823.html
   My bibliography  Save this paper

War and Peace: How Economic Prospects Drive Conflictuality

Author

Listed:
  • Jiang, Shuguang

    (Shandong University)

  • Villeval, Marie Claire

    (CNRS)

  • Zhang, Zhengping

    (Shandong University)

  • Zheng, Jie

    (Shandong University)

Abstract

We experimentally study how economic prospects and power shifts affect the risk of conflict through a dynamic power rivalry game. Players decide whether to maintain the status quo or challenge a rival under declining, constant, or growing economic prospects. We find that conflict rates are highest when economic prospects decline and lowest when they improve. A behavioral model incorporating psychological costs and reciprocity can explain these differences. A survey on U.S.-China relations supports the real-world relevance of these findings. Inspired by the Thucydides’s Trap, this study highlights how economic expectations shape conflict dynamics, offering key insights into geopolitical stability.

Suggested Citation

  • Jiang, Shuguang & Villeval, Marie Claire & Zhang, Zhengping & Zheng, Jie, 2025. "War and Peace: How Economic Prospects Drive Conflictuality," IZA Discussion Papers 17823, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17823
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp17823.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    conflict; economic prospects; Thucydides’s Trap; power shift; experiment;
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp17823. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.