%0 Report
        %A Jiang, Shuguang
%A Villeval, Marie Claire
%A Zhang, Zhengping
%A Zheng, Jie
        %T War and Peace: How Economic Prospects Drive Conflictuality
        %D 2025
        %8 2025 Apr
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 17823
        %U https://www.iza.org/publications/dp17823
        %X We experimentally study how economic prospects and power shifts affect the risk of conflict through a dynamic power rivalry game. Players decide whether to maintain the status quo or challenge a rival under declining, constant, or growing economic prospects. We find that conflict rates are highest when economic prospects decline and lowest when they improve. A behavioral model incorporating psychological costs and reciprocity can explain these differences. A survey on U.S.-China relations supports the real-world relevance of these findings. Inspired by the Thucydides’s Trap, this study highlights how economic expectations shape conflict dynamics, offering key insights into geopolitical stability.
        %K Thucydides’s Trap
%K economic prospects
%K conflict
%K power shift
%K experiment