Evolutionary Stability and Evolution of Misperceptions in Conflict

We find Evolutionary Stable Strategy (ESS) and Evolutionary Stable Preference (ESP) in conflict modeled as a pairwise contest game for an endogenous prize. Our study attributes overbidding under ESS to misperceptions about various attributes of rival players in a conflict that evolved through ESP. We show that players tend to over perceive the resource endowments of rival players and this, in turn, gives rise to the more aggressive behaviour of players under ESS. We also use the notion of conflict expenditure in an endogenous prize setting to show that the false perception about the rival players under ESP gives rise to higher levels of dissipation of resources into appropriation. JEL Classifications: D70, D72, D74