Social structure affects the likelihood of group conflicts, although it has
been disregarded by previous explanations. This study extends the intergro
up public goods game model and integrates the influence of structural embed
dedness and social incentives in the analysis of harmful group conflict. Th
e 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 likeli
hood of conflict can be characterized by an S-shape function. The segregati
on effect is stronger if local selective incentives are relatively importan
t compared to confirmation from neighbors. Results show that under certain
structural conditions, rational individuals are more likely to be trapped i
n harmful conflict than less rational actors, and rigid assumptions about i
ndividual rationality strengthen the effect of clustering on intergroup con
flict.