Abstract: In this work we use an economic experiment to study the effect of polarization in conflicts between—and within—alliances. The problem of polarized alliances is analyzed using a computer-based game in which subjects participate in sequential between- and within-alliance contests, and polarization is imposed as asymmetric income among alliance members. The experiment consisted of three stages: in the first stage subjects were asked to earn points by performing a task in the computer. In the second stage subjects were paired and asked to contest against another pair—for the rights to a prize—using the points earned. In the third stage subjects had to contest against their partner for the prize. Results from the experiment suggest induced income inequality (polarization) affects conflict between alliances—decreasing contributions to the alliance—and within alliances—increasing spending in internal fights—when sharing agreements do not exist and prizes are exogenous.

Biography: Cristian is a Fulbright Scholar from Chile. He holds a Ph.D. in Economics from the University of Wyoming, USA. His research is concerned with the existence of markets, their relationship with natural systems and the effect of cognitive biases in them. He is interested in the integration of human and natural systems (bio-economic models) and their interaction, using economics to develop mechanisms that increase the efficiency of coupled human-natural systems, incorporating psychological insights into the  analysis of economic human behavior, and testing existent—and new—economic models using laboratory and field experiments.