Alliances Among Asymmetric Countries
AbstractWe examine alliances between asymmetric countries. We find that the results depend on the nature of the equilibrium. If the equilibrium is an interior one then, with an increase in asymmetry, the level of the alliance-wide defense good decreases and the divergence between the first best and the equilibrium level of the defense good increases. In case the equilibrium involves a corner solution, these results are reversed though. It may be argued, however, that the interior equilibrium case is the more relevant one.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1502.
Date of creation: Sep 2006
Date of revision:
Alliance; Asymmetry; Public good; Defence;
Other versions of this item:
- Prabal Roy Chowdhury, 2006. "Alliances among asymmetric countries," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 06-04, Indian Statistical Institute, New Delhi, India.
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
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