Abstract: The view is examined that the adaptive value of conventional aspects of fighting behaviour is for assessment of relative RHP (resource holding power) of the combatants. Outcomes of aggressive disputes should be decided by each individual's fitness budget available for expenditure during a fight (determined by the fitness difference between adoption of alternative strategies, escalation or withdrawal without escalation) and on the rate of expenditure of the fitness budget if escalation occurs (determined by the RHPs of the combatants). Thus response thresholds for alternative strategies (“assessments”) will be determined by natural selection on a basis of which opponent is likely to expend its fitness budget first, should escalation occur. This “loser” should retreat (before escalation) and the winner should stay in possession of the resource. Many aggressive decisions depend on whether one is a resource holder, or an attacker. Assuming the RHP of the combatants to be equal, there are many instances of fitness pay-off imbalances between holder and attacker which should weight the dispute outcome in favour of one or other opponent by allowing it a greater expendable fitness budget. Usually the weighting favours the holder; the attacker therefore needs a correspondingly higher RHP before it may be expected to win. This is not invariably the case, and much observed data fits the predictions of this sort of model. If assessments are perfect and budget expenditure rates exactly predictable, then there would never seem to be any case for escalation. Escalation can be explained in terms of injury inflictions (expenditures) occurring as discrete events; i.e. as “bouts” won or lost during fighting. Assessment can give only a probabilistic prediction of the outcome of a bout. A simple model is developed to investigate escalation situations. Each combatant assesses relative RHP; this correlates with an absolute probability of winning the next bout (cabs). The stake played for is infliction of loss of RHP and is determined by the fitness budgets of the opponents. (Each individual plays for the withdrawal of its opponent.) This defines a critical probability of winning (ccrit) for each combatant, above which escalation is the favourable strategy (cabs > ccrit) and below which withdrawal is favourable (cabs < ccrit). Escalation should occur only where cabs-ccrit is positive for both combatants. This model gives predictions compatible with the observations, indicating that RHP loss alone can be adequate to explain withdrawal: escalation behaviour. Withdrawal tendency will be increased by low searching costs. Escalations should be restricted to closely matched RHP opponents if RHP disparity is the major imbalance. Outside the “escalation range” of a given individual, the higher RHP individual wins and the lower one loses (i.e. it should withdraw after conventional display). RHP disparity and holder: attacker imbalance should both interact to shape the observed pattern, though their relative importances will depend on species and situation. In some instances selection may favour immediate withdrawal from an occupied territory even without assessment of RHP.