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The alliance formation puzzle and capacity constraints

  • Konrad, Kai A.
  • Kovenock, Dan

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.

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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 103 (2009)
Issue (Month): 2 (May)
Pages: 84-86

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Handle: RePEc:eee:ecolet:v:103:y:2009:i:2:p:84-86
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Joan Esteban & József Sákovics, 2002. "Olson vs. Coase: Coalitional worth in conflict," Economics Working Papers 645, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Kai A. Konrad & Wolfgang Leininger, 2007. "Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans," Ruhr Economic Papers 0016, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Baye, M. & Kovenock, D. & de Vries, C., 1990. "The All-Pay Auction with Complete Information," Discussion Paper 1990-51, Tilburg University, Center for Economic Research.
  4. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
  5. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
  6. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, March.
  7. Kovenock, Dan & Roberson, Brian, 2008. "Coalitional Colonel Blotto games with application to the economics of alliances
    ["Colonel Blotto"-Koalitionsspiele mit Anwendung auf die ökonomische Theorie von Allianzen]
    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2008-02, Social Science Research Center Berlin (WZB).
  8. José Alcalde & Matthias Dahm, 2007. "All-Pay Auction Equilibria In Contests," Working Papers. Serie AD 2007-27, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  9. Che, Yeon-Koo & Gale, Ian, 1997. " Rent Dissipation When Rent Seekers Are Budget Constrained," Public Choice, Springer, vol. 92(1-2), pages 109-26, July.
  10. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004.
  11. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  12. Skaperdas, Stergios, 1998. " On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July.
  13. Harris, Christopher & Reny, Philip & Robson, Arthur, 1995. "The Existence of Subgame-Perfect Equilibrium in Continuous Games with Almost Perfect Information: A Case for Public Randomization," Econometrica, Econometric Society, vol. 63(3), pages 507-44, May.
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