Social structure affects the likelihood of group conflicts, although it has been disregarded by previous explanations. This study extends the intergroup public goods game model and integrates the influence of structural embeddedness and social incentives in the analysis of harmful group conflict. The integrated model explains why intergroup conflicts are often promoted by segregation and describes conditions under which this effect does not occur. The model predicts that a relationship between segregation and the likelihood of conflict can be characterized by an S-shape function. The segregation effect is stronger if local selective incentives are relatively important compared to confirmation from neighbors. Results show that under certain structural conditions, rational individuals are more likely to be trapped in harmful conflict than less rational actors, and rigid assumptions about individual rationality strengthen the effect of clustering on intergroup conflict.
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