Inter-group conflict and intra-group punishment in an experimental contest game

We study how conflict in contest games is influenced by rival parties being groups and by group members being able to punish each other. Our motivation stems from the analysis of socio-political conflict. The theoretical prediction is that conflict expenditures are independent of group size and of whether punishment is available or not. We find, first, that conflict expenditures of groups are substantially larger than those of individuals, and both are above equilibrium. Second, allowing group members to punish each other leads to even larger conflict expenditures. These results contrast with those from public goods experiments where punishment enhances efficiency.