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The alliance formation puzzle and capacity constraints

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  • Konrad, Kai A.
  • Kovenock, Dan

Abstract

The formation of an alliance in conflict situations is known to suffer from a collective action problem and from the potential of internal conflict. We show that budget constraints of an intermediate size can overcome this strong disadvantage and explain the formation of alliances.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 103 (2009)
Issue (Month): 2 (May)
Pages: 84-86

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Handle: RePEc:eee:ecolet:v:103:y:2009:i:2:p:84-86

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Web page: http://www.elsevier.com/locate/ecolet

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Keywords: Alliance formation puzzle Military conflict Budget constraints;

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References

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  1. Che, Yeon-Koo & Gale, Ian, 1997. " Rent Dissipation When Rent Seekers Are Budget Constrained," Public Choice, Springer, vol. 92(1-2), pages 109-26, July.
  2. Wärneryd, Karl, 1997. "Distributional Conflict and Jurisdictional Organization," Working Paper Series in Economics and Finance 173, Stockholm School of Economics.
  3. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991. "The All-Pay Auction With Complete Information," Purdue University Economics Working Papers 1007, Purdue University, Department of Economics.
  4. José Alcalde & Matthias Dahm, 2007. "All-Pay Auction Equilibria In Contests," Working Papers. Serie AD 2007-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  5. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
  6. Kovenock, Dan & Roberson, Brian, 2008. "Coalitional Colonel Blotto games with application to the economics of alliances," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-02, Social Science Research Center Berlin (WZB).
  7. Michelle R. Garfinkel, 2004. "On the Stability of Group Formation: Managing the Conflict Within," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(1), pages 43-68, February.
  8. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
  9. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  10. Kai A. Konrad & Wolfgang Leininger, 2007. "Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans," Ruhr Economic Papers 0016, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  11. Skaperdas, Stergios, 1998. " On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July.
  12. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
  13. Harris, Christopher & Reny, Philip & Robson, Arthur, 1995. "The Existence of Subgame-Perfect Equilibrium in Continuous Games with Almost Perfect Information: A Case for Public Randomization," Econometrica, Econometric Society, vol. 63(3), pages 507-44, May.
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Citations

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Cited by:
  1. Ke, Changxia, 2013. "Fight Alone or Together? The Need to Belong," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 421, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  2. Changxia Ke & Kai A. Konrad & Florian Morath, 2011. "Brothers in Arms - An Experiment on the Alliance Puzzle," Working Papers brothers_in_arms, Max Planck Institute for Tax Law and Public Finance.
  3. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2013. "Endogenous group formation in experimental contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 419, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
  4. Konrad, Kai A., 2011. "Strategic aspects of fighting in alliances," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2011-105, Social Science Research Center Berlin (WZB).
  5. Konrad, Kai A., 2010. "Information alliances in contests with budget limits," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-21, Social Science Research Center Berlin (WZB).
  6. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2013. "Endogenous group formation in experimental contests," Discussion Papers, Research Unit: Economics of Change SP II 2013-301, Social Science Research Center Berlin (WZB).
  7. Iryna Topolyan, 2014. "Rent-seeking for a public good with additive contributions," Social Choice and Welfare, Springer, vol. 42(2), pages 465-476, February.
  8. Jay Pil Choi & Subhasish M. Chowdhury & Jaesoo Kim, 2011. "Group Contests with Internal Conflict and Power Asymmetry," University of East Anglia Applied and Financial Economics Working Paper Series 025, School of Economics, University of East Anglia, Norwich, UK..
  9. Konrad, Kai A., 2010. "Dynamic contests," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-10, Social Science Research Center Berlin (WZB).

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