Alliances among asymmetric countries
We examine alliances between asymmetric countries. We find that the results depend on the nature of the equilibrium. If the equilibrium is an interior one then, with an increase in asymmetry, the level of the alliance-wide defense good decreases and the divergence between the first best and the equilibrium level of the defense good increases. In case the equilibrium involves a corner solution, these results are reversed though. It may be argued, however, that the interior equilibrium case is the more relevant one.
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- Cornes, Richard & Hartley, Roger & Sandler, Todd, 1999.
"Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof Via Contraction,"
Staff General Research Papers Archive
1630, Iowa State University, Department of Economics.
- Cornes, Richard & Hartley, Roger & Sandler, Todd, 1999. " Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 499-509.
- Richard Cornes & Roger Hartley & Todd Sandler, 1999. "Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction," Keele Department of Economics Discussion Papers (1995-2001) 99/02, Department of Economics, Keele University.
- Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
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- Wong, K-Y., 1988. "Foreign Trade, Military Alliance, And Defence-Burden Sharing," Discussion Papers in Economics at the University of Washington 88-11, Department of Economics at the University of Washington.
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