Alliance Formation and Coercion in Networks

Timo Hiller

No 108251, Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This paper presents a game-theoretic model of network formation, which allows agents to enter bilateral alliances and to extract payoffs from enemies. Each pair of agents creates a surplus of one, which allies divide in equal parts. If agents are enemies, then the agent with more allies obtains a larger share of the surplus. I show that Nash equilibria are of two types. First, a state of utopia, where all agents are allies. Second, asymmetric equilibria, such that agents can be partitioned into sets of different size, where agents within the same set are allies and agents in different sets are enemies. These results stand in contrast to coalition formation games in the economics of conflict literature, where stable group structures are generally symmetric. The model provides a game-theoretic foundation for structural balance, a long- standing notion in social psychology, which has been fruitfully applied to the study of alliance formation in international relations.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 31
Date: 2011-06
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://ageconsearch.umn.edu/record/108251/files/NDL2011-042.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:feemcl:108251

DOI: 10.22004/ag.econ.108251

Access Statistics for this paper

More papers in Climate Change and Sustainable Development from Fondazione Eni Enrico Mattei (FEEM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().