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Alliances Among Asymmetric Countries

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  • Roy Chowdhury, Prabal

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.

Suggested Citation

  • Roy Chowdhury, Prabal, 2006. "Alliances Among Asymmetric Countries," MPRA Paper 1502, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:1502
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    References listed on IDEAS

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    1. Weber, Shlomo & Wiesmeth, Hans, 1991. "Economic models of NATO," Journal of Public Economics, Elsevier, vol. 46(2), pages 181-197, November.
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    More about this item

    Keywords

    Alliance; Asymmetry; Public good; Defence;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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