The Alliance Formation Puzzle and Capacity Constraints

WZB Markets and Politics Working Paper No. SP II 2008-07

9 Pages Posted: 26 Aug 2010

See all articles by Kai A. Konrad

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Dan Kovenock

Chapman University - Economic Science Institute; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2008

Abstract

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.

Suggested Citation

Konrad, Kai A. and Kovenock, Daniel, The Alliance Formation Puzzle and Capacity Constraints (February 1, 2008). WZB Markets and Politics Working Paper No. SP II 2008-07, Available at SSRN: https://ssrn.com/abstract=1664990 or http://dx.doi.org/10.2139/ssrn.1664990

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

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Germany

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Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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IZA Institute of Labor Economics

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Daniel Kovenock

Chapman University - Economic Science Institute ( email )

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Orange, CA 92866
United States

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

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