Letters in Economic Research Updates
The Economics of Revenge: Theoretical Foundations, Social Dynamics, and Application to Sudanâs SAF-RSF Conflict
Abstract
Issam AW Mohamed
The economics of revenge investigates how vengeful motivations perpetuate conflict persistence, distort resource allo- cation, and generate profound economic inefficiency, extending traditional greed-grievance frameworks by embedding emotional retaliation within rational choice theory. This comprehensive manuscript synthesizes foundational literature on revenge capitalism, behavioral economics, conflict theory, and social mobilization; formalizes an enhanced game-theo- retic framework with detailed derivations, propositions, and simulations; and applies it empirically to Sudan’s ongoing Sudanese Armed Forces (SAF)–Rapid Support Forces (RSF) war, where illicit gold revenues exceeding 260 million USD annually sustain retaliatory violence cycles. The analysis integrates multiple theoretical perspectives—including griev- ance-based mobilization, resource curse dynamics, systemic vengeance in capitalism, and asymmetric spite in strategic interaction—to demonstrate how marginalization and ethnic framing drive recruitment into armed groups, creating self-reinforcing cycles of violence. Key findings demonstrate multiple Nash equilibria—including Pareto-inferior revenge traps—with robust policy implications such as targeted gold sanctions, unified mediation protocols, revenue-sharing mechanisms, and transitional justice frameworks to destabilize high-spite states. The model reveals that spite param- eters as low as *r* = 0.3 can reduce total welfare by 40% relative to peaceful cooperation, aligning with Sudan’s pro- jected 42% GDP contraction amid protracted fighting. Historical comparison with Native American near-extermination reveals why contemporary asymmetries—military parity, economic autonomy, geopolitical constraints, and international legal norms—preclude military solutions, necessitating negotiated political settlements addressing root grievances.