Group Enrolment and Conflict Behavior

A large literature in psychology and economics suggests that enrolment into groups shapes conflict behavior, even if the groups lack a salient identity. Our experimental design systematically modifies group formation and prize sharing rules to explain behavioral differences between conflicts among individuals and intergroup feuds. Apart from rather high levels of conflict expenditure in all treatments, we find no specific evidence for outgroup hostility. Group formation induces conditional cooperation within the groups. The prize distribution rules have a strong aggregate impact. Proportional prize sharing in winning groups fosters expenditure while egalitarian prize-sharing – a staple of such experiments – induces the predicted free-rider effects. Overall, our results support inequality aversion rather than parochial altruism as an explanation for differences in expenditures between individual and group conflicts.