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Alliances Among Asymmetric Countries

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Author Info
Roy Chowdhury, Prabal

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Abstract

We 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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Publisher Info
Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1502.

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Date of creation: Sep 2006
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Handle: RePEc:pra:mprapa:1502

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Related research
Keywords: Alliance Asymmetry Public good Defence.

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Find related papers by JEL classification:
P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances

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References listed on IDEAS
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  1. Todd Sandler & Keith Hartley, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September. [Downloadable!] (restricted)
  2. Richard Cornes & Roger Hartley & Todd Sandler, 1999. "Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction," Keele Department of Economics Discussion Papers (1995-2001) 99/02, Department of Economics, Keele University.
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  3. Weber, S. & Wiesmeth, H., 1990. "Economic Models of NATO," Papers 90-7, York (Canada) - Department of Economics.
  4. Wong, K-Y., 1988. "Foreign Trade, Military Alliance, And Defence-Burden Sharing," Discussion Papers in Economics at the University of Washington 88-11, Department of Economics at the University of Washington.
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This page was last updated on 2008-11-17.

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