Olson vs. Coase: Coalitional Worth in Conflict

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Olson vs. Coase: Coalitional Worth in Conflict

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Joan Esteban
József Sákovics

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Abstract

We analyze a model of conflict with endogenous choice of effort, where subsets of the contenders may force the resolution to be sequential: First the alliance fights it out with the rest and – in case they win – later they fight it out among themselves. For three-player games, we find that it will not be in the interest of any two of them to form an alliance. We obtain this result under two different scenarios: equidistant preferences with varying relative strengths, and vicinity of preferences with equal distribution of power. We conclude that the commonly made assumption of super-additive coalitional worth is suspect.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 645.

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Date of creation: Sep 2002
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Handle: RePEc:upf:upfgen:645

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Article
- Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December. [Downloadable!]
Paper
- Joan Esteban & Jozsef Sakovics, 2004. "Olson vs. Coase: coalitional worth in conflict," ESE Discussion Papers 81, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances

This paper has been announced in the following NEP Reports:

NEP-ALL-2002-10-23 (All new papers)
NEP-CDM-2002-10-23 (Collective Decision-Making)
NEP-POL-2002-10-23 (Positive Political Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Ray, Debraj & Vohra, Rajiv, 1999. "A Theory of Endogenous Coalition Structures," Games and Economic Behavior, Elsevier, vol. 26(2), pages 286-336, January. [Downloadable!] (restricted)
Other versions:
- Ray, D. & Vohra, R., 1996. "A Theory of Endogenous Coalition Structure," Papers 68, Boston University - Industry Studies Programme.
- Debraj Ray & Rajiv Vohra, 1996. "A Theory of Endogenous Coalition Structure," Papers 0068, Boston University - Industry Studies Programme.
- Debraj Ray & Rajiv Vohra, 1998. "A Theory of Endogenous Coalition Structures," Working Papers 98-1, Brown University, Department of Economics, revised Jan 1998.
Garfinkel, Michelle R., 2004. "Stable alliance formation in distributional conflict," European Journal of Political Economy, Elsevier, vol. 20(4), pages 829-852, November. [Downloadable!] (restricted)
Other versions:
- Michelle R. Garfinkel, 2003. "Stable Alliance Formation in Distributional Conflict," Public Economics 0305001, EconWPA, revised 16 Jun 2003. [Downloadable!]
Esteban, J. & Sakovics, J., 2000. "Temporary Alliance Formation: Endogenous Sequencing in Conflict Games," Papers 43, El Instituto de Estudios Economicos de Galicia Pedro Barrie de la Maza.
Francis Bloch & Santiago S?chez-Pag? & Raphael Soubeyran, . "When does universal peace prevail? Secession and group formation in rent seeking contests and policy conflD72icts," UFAE and IAE Working Papers 543.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
Greenberg, Joseph, 1994. "Coalition structures," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 37, pages 1305-1337 Elsevier. [Downloadable!] (restricted)
Baik, Kyung Hwan & Lee, Sanghack, 2001. "Strategic Groups and Rent Dissipation," Economic Inquiry, Oxford University Press, vol. 39(4), pages 672-84, October.
Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August. [Downloadable!] (restricted)
Noh, Suk Jae, 2002. "Resource distribution and stable alliances with endogenous sharing rules," European Journal of Political Economy, Elsevier, vol. 18(1), pages 129-151, March. [Downloadable!] (restricted)
Skaperdas, Stergios, 1998. " On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July. [Downloadable!] (restricted)
Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March. [Downloadable!] (restricted)
Other versions:
- Ray, D. & Vohra, R., 1993. "Equilibrium Binding Agreements," Papers 21, Boston University - Department of Economics.
Guofu Tan & Ruqu Wang, 1997. "Endogenous Coalition Formation in Rivalry," Working Papers 956, Queen's University, Department of Economics. [Downloadable!]

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Kai A. Konrad & Dan Kovenock, 2008. "The Alliance Formation Puzzle and Capacity Constraints," Purdue University Economics Working Papers 1209, Purdue University, Department of Economics. [Downloadable!]
Other versions:
- Konrad, Kai A & Kovenock, Dan, 2008. "The Alliance Formation Puzzle and Capacity Constraints," CEPR Discussion Papers 6741, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Konrad, Kai A. & Kovenock, Dan, 2009. "The alliance formation puzzle and capacity constraints," Economics Letters, Elsevier, vol. 103(2), pages 84-86, May. [Downloadable!] (restricted)
Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004. [Downloadable!]
Santiago Sanchez-Pages, 2007. "Endogenous Coalition Formation in Contests," ESE Discussion Papers 158, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
Other versions:
- Santiago Sánchez-Pagés, 2007. "Endogenous coalition formation in contests," Review of Economic Design, Springer, vol. 11(2), pages 139-163, September. [Downloadable!] (restricted)

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