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The alliance formation puzzle and capacity constraints

Author

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  • Konrad, Kai A.
  • Kovenock, Dan

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

  • Konrad, Kai A. & Kovenock, Dan, 2009. "The alliance formation puzzle and capacity constraints," Economics Letters, Elsevier, vol. 103(2), pages 84-86, May.
  • Handle: RePEc:eee:ecolet:v:103:y:2009:i:2:p:84-86
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    References listed on IDEAS

    as
    1. Dan Kovenock & Michael R. Baye & Casper G. de Vries, 1996. "The all-pay auction with complete information (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 291-305.
    2. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
    3. Dan Kovenock & Brian Roberson, 2012. "Coalitional Colonel Blotto Games with Application to the Economics of Alliances," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(4), pages 653-676, August.
    4. Michelle R. Garfinkel, 2004. "On the Stability of Group Formation: Managing the Conflict Within," Conflict Management and Peace Science, Peace Science Society (International), vol. 21(1), pages 43-68, February.
    5. repec:zbw:rwirep:0016 is not listed on IDEAS
    6. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    7. 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.
    8. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
    9. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
    10. Skaperdas, Stergios, 1998. "On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July.
    11. Che, Yeon-Koo & Gale, Ian, 1997. "Rent Dissipation When Rent Seekers Are Budget Constrained," Public Choice, Springer, vol. 92(1-2), pages 109-126, July.
    12. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
    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 507-544, May.
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    Cited by:

    1. repec:bla:scandj:v:118:y:2016:i:4:p:816-840 is not listed on IDEAS
    2. 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.
    3. 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.
    4. 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.
    5. Kai Konrad, 2012. "Information alliances in contests with budget limits," Public Choice, Springer, vol. 151(3), pages 679-693, June.
    6. 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.
    7. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2015. "Endogenous group formation in experimental contests," European Economic Review, Elsevier, vol. 74(C), pages 163-189.
    8. 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.
    9. 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.
    10. Konrad, Kai A., 2010. "Dynamic contests," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-10, Social Science Research Center Berlin (WZB).
    11. repec:eee:jetheo:v:176:y:2018:i:c:p:372-392 is not listed on IDEAS
    12. 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.
    13. Kai A. Konrad & Florian Morath, 2015. "To deter or to moderate? Alliance formation in contests with incomplete information," Working Papers tax-mpg-rps-2015-15, Max Planck Institute for Tax Law and Public Finance.
    14. Christian Ewerhart, 2015. "Contest success functions: the common-pool perspective," ECON - Working Papers 195, Department of Economics - University of Zurich.
    15. repec:cai:repdal:redp_273_0307 is not listed on IDEAS

    More about this item

    Keywords

    Alliance formation puzzle Military conflict Budget constraints;

    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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