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The Alliance Formation Puzzle and Capacity Constraints

  • Kai A. Konrad
  • Dan Kovenock

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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File URL: http://www.krannert.purdue.edu/programs/phd/Working-paper-series/Year-2008/1209.pdf
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Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1209.

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Length: 8 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:pur:prukra:1209
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Web page: http://www.krannert.purdue.edu/programs/phd

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  1. Baye, M.R. & Kovenock, D. & De Vries, C.G., 1991. "The All-Pay Auction With Complete Information," Purdue University Economics Working Papers 1007, Purdue University, Department of Economics.
  2. Michelle R. Garfinkel, 2003. "On the Stability of Group Formation: Managing the Conflict Within," Public Economics 0312005, EconWPA, revised 04 Mar 2004.
  3. Konrad, Kai A. & Leininger, Wolfgang, 2007. "Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans," Ruhr Economic Papers 16, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  4. Wärneryd, Karl, 1997. "Distributional Conflict and Jurisdictional Organization," SSE/EFI Working Paper Series in Economics and Finance 173, Stockholm School of Economics.
  5. 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).
  6. Joan Esteban & Jozsef Sakovics, 2002. "Olson vs. Coase: coalitional worth in conflict," ESE Discussion Papers 81, Edinburgh School of Economics, University of Edinburgh.
  7. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  8. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, June.
  9. Skaperdas, Stergios, 1998. "On the Formation of Alliances in Conflict and Contests," Public Choice, Springer, vol. 96(1-2), pages 25-42, July.
  10. 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.
  11. repec:zbw:rwirep:0016 is not listed on IDEAS
  12. 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.
  13. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
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