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Stable Alliance Formation in Distributional Conflict

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Author Info
Michelle R. Garfinkel (University of California at Irvine)

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Abstract

This paper develops a positive analysis of alliance formation that builds on a simple economic model featuring a “winner-take-all” contest for control of some resource. When an alliance forms, members pool their efforts in that contest and,if successful, apply the resource to a joint production process. The analysis does not assume that the alliance has some special advantage in the conflict or that the joint production process exhibits increasing returns. Nor is there any presumption that peace prevails among the alliance members. In this setting, the analysis finds that, due to the familiar free-rider problem, the formation of alliances tends to reduce the severity of the conflict over the contestable resource. Furthermore, despite the internal conflict that arises among the winning alliance’s members over the distribution of their joint product, under reasonable conditions this effect alone is sufficient to support stable alliance formation in a noncooperative equilibrium.

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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0305001.

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Date of creation: 05 May 2003
Date of revision: 16 Jun 2003
Handle: RePEc:wpa:wuwppe:0305001

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Web page: http://129.3.20.41

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Related research
Keywords: Conflict; endogenous alliance structure; resource allocation; free-rider problem.;

Other versions of this item:

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D60 - Microeconomics - - Welfare Economics - - - General
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

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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.:
  1. Nitzan, Shmuel, 1991. "Collective Rent Dissipation," Economic Journal, Royal Economic Society, vol. 101(409), pages 1522-34, November. [Downloadable!] (restricted)
  2. Grossman, Herschel I & Kim, Minseong, 1995. "Swords or Plowshares? A Theory of the Security of Claims to Property," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1275-88, December. [Downloadable!] (restricted)
  3. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February. [Downloadable!] (restricted)
  4. 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:
  5. 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)
  6. 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!]
  7. Baik, Kyung Hwan & Lee, Sanghack, 2001. "Strategic Groups and Rent Dissipation," Economic Inquiry, Oxford University Press, vol. 39(4), pages 672-84, October.
  8. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December. [Downloadable!] (restricted)
  9. Yi, Sang-Seung & Shin, Hyukseung, 2000. "Endogenous formation of research coalitions with spillovers," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 229-256, February. [Downloadable!] (restricted)
  10. Garfinkel, Michelle R, 1990. "Arming as a Strategic Investment in a Cooperative Equilibrium," American Economic Review, American Economic Association, vol. 80(1), pages 50-68, March. [Downloadable!] (restricted)
  11. 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)
  12. Bernheim, B. Douglas & Peleg, Bezalel & Whinston, Michael D., 1987. "Coalition-Proof Nash Equilibria I. Concepts," Journal of Economic Theory, Elsevier, vol. 42(1), pages 1-12, June. [Downloadable!] (restricted)
  13. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March. [Downloadable!] (restricted)
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  14. Skaperdas, Stergios, 1992. "Cooperation, Conflict, and Power in the Absence of Property Rights," American Economic Review, American Economic Association, vol. 82(4), pages 720-39, September. [Downloadable!] (restricted)
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  15. Genicot, C. & Skaperdas, S., 2000. "Investing in Confict Management," Papers 00-01-17, California Irvine - School of Social Sciences.
  16. Herschel I. Grossman, 2001. "The Creation of Effective Property Rights," American Economic Review, American Economic Association, vol. 91(2), pages 347-352, May. [Downloadable!] (restricted)
    Other versions:
  17. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August. [Downloadable!] (restricted)
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.)

  1. Santiago Sanchez-Pages, 2007. "Endogenous Coalition Formation in Contests," ESE Discussion Papers 158, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  2. Joan Esteban & Jozsef Sakovics, 2004. "Olson vs. Coase: coalitional worth in conflict," ESE Discussion Papers 81, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
    Other versions:
  3. Kjell Hausken, 2005. "Production and Conflict Models Versus Rent-Seeking Models," Public Choice, Springer, vol. 123(1), pages 59-93, April. [Downloadable!] (restricted)
  4. Michelle R. Garfinkel & Stergios Skaperdas, 2006. "Economics of Conflict: An Overview," Working Papers 050623, University of California-Irvine, Department of Economics, revised Sep 2006. [Downloadable!]
    Other versions:
  5. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004. [Downloadable!]
  6. Johannes Münster, 2009. "Group contest success functions," Economic Theory, Springer, vol. 41(2), pages 345-357, November. [Downloadable!] (restricted)
  7. Dutta, Indranil & Mishra, Ajit, 2005. "Does Inequality lead to Conflict?," Working Papers RP2005/34, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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