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The Alliance Formation Puzzle and Capacity Constraints

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  • Kai A. Konrad
  • Dan Kovenock

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.

Suggested Citation

  • Kai A. Konrad & Dan Kovenock, 2008. "The Alliance Formation Puzzle and Capacity Constraints," Purdue University Economics Working Papers 1209, Purdue University, Department of Economics.
    • Handle: RePEc:pur:prukra:1209
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    References listed on IDEAS

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    11. Konrad, Kai A. & Leininger, Wolfgang, 2007. "Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans," Ruhr Economic Papers 16, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

    1. Kai A. Konrad, 2011. "Strategie Aspects of Fighting in Alliances," Working Papers strategie_aspects_of_figh, Max Planck Institute for Tax Law and Public Finance.
    2. Michael D. König & Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2016. "The Long-lasting Shadow of the Allied Occupation of Austria on its Spatial Equilibrium," HiCN Working Papers 231, Households in Conflict Network.
    3. Ke, Changxia & Konrad, Kai A. & Morath, Florian, 2013. "Brothers in arms – An experiment on the alliance puzzle," Games and Economic Behavior, Elsevier, vol. 77(1), pages 61-76.
    4. Eliaz, Kfir & Wu, Qinggong, 2018. "A simple model of competition between teams," Journal of Economic Theory, Elsevier, vol. 176(C), pages 372-392.
    5. Jay Pil Choi & Subhasish M. Chowdhury & Jaesoo Kim, 2016. "Group Contests with Internal Conflict and Power Asymmetry," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(4), pages 816-840, October.
    6. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2015. "Endogenous group formation in experimental contests," European Economic Review, Elsevier, vol. 74(C), pages 163-189.
    7. Konishi, Hideo & Pan, Chen-Yu, 2021. "Endogenous alliances in survival contests," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 337-358.
    8. Iryna Topolyan, 2014. "Rent-seeking for a public good with additive contributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(2), pages 465-476, February.
    9. James W. Boudreau & Lucas Rentschler & Shane Sanders, 2019. "Stag hunt contests and alliance formation," Public Choice, Springer, vol. 179(3), pages 267-285, June.
    10. Raghul S Venkatesh, 2018. "On Information Aggregation in International Alliances," AMSE Working Papers 1855, Aix-Marseille School of Economics, France, revised Jul 2019.
    11. Bettina Klose & Dan Kovenock, 2015. "Extremism drives out moderation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(4), pages 861-887, April.
    12. Konrad, Kai A., 2010. "Dynamic contests," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-10, WZB Berlin Social Science Center.
    13. Kai Konrad, 2012. "Information alliances in contests with budget limits," Public Choice, Springer, vol. 151(3), pages 679-693, June.
    14. Changxia Ke, 2011. "Fight Alone or Together? The Need to Belong," Working Papers fight_alone_or_together, Max Planck Institute for Tax Law and Public Finance.
    15. Send, Jonas, 2020. "Conflict between non-exclusive groups," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 858-874.
    16. Qiang Fu & Jingfeng Lu, 2020. "On Equilibrium Player Ordering In Dynamic Team Contests," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1830-1844, October.
    17. Francis Bloch, 2009. "Endogenous formation of alliances in conflicts," Working Papers hal-00435387, HAL.
    18. Christian Ewerhart, 2015. "Contest success functions: the common-pool perspective," ECON - Working Papers 195, Department of Economics - University of Zurich.
    19. Kai A. Konrad & Florian Morath, 2018. "To Deter Or To Moderate? Alliance Formation In Contests With Incomplete Information," Economic Inquiry, Western Economic Association International, vol. 56(3), pages 1447-1463, July.
    20. Malin Arve & Olga Chiappinelli, 2021. "The Role of Budget Constraints in Sequential Elimination Tournaments," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1059-1087, October.
    21. Antoine Pietri, 2017. "Les modèles de « rivalité coercitive » dans l’analyse économique des conflits," Revue d'économie politique, Dalloz, vol. 127(3), pages 307-352.
    22. Bo Chen & Shanlin Jin, 2023. "Elimination contests with collusive team players," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(1), pages 61-89, February.
    23. Timothy Mathews & Shane Sanders, 2019. "Strategic and experimental analyses of conflict and terrorism," Public Choice, Springer, vol. 179(3), pages 169-174, June.

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    More about this item

    Keywords

    alliance formation puzzle; military conflict; budget constraints;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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