Amegashie, J. Atsu; Runkel, Marco - Department of Economics and Finance, College of … - 2008
We consider a differential game of a conflict between two factions who both have a desire to exact revenge. We show … that, in contrast to conventional wisdom, the desire for revenge need not lead to escalation of conflicts. Surprisingly, in … increases. This result is not possible in the absence of a desire for revenge. The closed-loop equilibrium is characterized by a …