Resolving Social Conflicts Through Hostage Posting: Theoretical and Empirical Considerations

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The well-known Prisoner's Dilemma (PD) is often used to model situations of social conflict between two or more actors. The essence of the dilemma is that each actor has individual incentives to act according to narrow self-interests referred to as defection, yet all actors are better off and receive higher payoffs for mutual cooperation. Many attempts have been made to study ways by which cooperation can be enhanced. This article focuses on a specific device, namely hostage posting or pledging of a bond. In the first part, a game-theoretic model is sketched that specifies the conditions under which hostage posting will effectively promote cooperative behavior. In the second part, the authors describe several experiments that were designed to test the descriptive power of the theory, and at the same time they provide further insight into the processes underlying social conflicts. Implications regarding social conflicts and possible applications to other domains are briefly discussed at the end.

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