Stable Alliance Formation in Distributional Conflict

Michelle Garfinkel

Public Economics from University Library of Munich, Germany

Abstract: This paper develops a positive analysis of alliance formation that builds on a simple economic model featuring a "winner-take-all" contest for control of some resource. When an alliance forms, members pool their efforts in that contest and,if successful, apply the resource to a joint production process. The analysis does not assume that the alliance has some special advantage in the conflict or that the joint production process exhibits increasing returns. Nor is there any presumption that peace prevails among the alliance members. In this setting, the analysis finds that, due to the familiar free-rider problem, the formation of alliances tends to reduce the severity of the conflict over the contestable resource. Furthermore, despite the internal conflict that arises among the winning alliance’s members over the distribution of their joint product, under reasonable conditions this effect alone is sufficient to support stable alliance formation in a noncooperative equilibrium.

Keywords: Conflict; endogenous alliance structure; resource allocation; free-rider problem. (search for similar items in EconPapers)
JEL-codes: C72 D60 D72 D74 (search for similar items in EconPapers)
Date: 2003-05-05, Revised 2004-03-04
New Economics Papers: this item is included in nep-gth
Note: Type of Document - pdf; prepared on IBM PC ; to print on HP;
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Stable alliance formation in distributional conflict (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwppe:0305001

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