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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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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
Contact details of provider: Postal: Krannert Building, West Lafayette, IN 47907
Web page: http://www.krannert.purdue.edu/programs/phd

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  1. 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.
  2. Joan Esteban, 2003. "Olson VS. Coase: Coalitional Worth in Conflict," Theory and Decision, Springer, vol. 55(4), pages 339-357, December.
  3. 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.
  4. repec:rwi:repape:0016 is not listed on IDEAS
  5. Katz, Eliakim & Tokatlidu, Julia, 1996. "Group competition for rents," European Journal of Political Economy, Elsevier, vol. 12(4), pages 599-607, December.
  6. 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.
  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. Arye L. Hillman & John G. Riley, 1987. "Politically Contestable Rents and Transfers," UCLA Economics Working Papers 452, UCLA Department of Economics.
  9. Warneryd, Karl, 1998. "Distributional conflict and jurisdictional organization," Journal of Public Economics, Elsevier, vol. 69(3), pages 435-450, September.
  10. 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.
  11. Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603, March.
  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. Konrad, Kai A. & Leininger, Wolfgang, 2007. "Self-enforcing Norms and the Efficient Non-cooperative Organization of Clans," CEPR Discussion Papers 6333, C.E.P.R. Discussion Papers.
  14. 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.
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