DP6741 The Alliance Formation Puzzle and Capacity Constraints
|Author(s):||Kai A. Konrad, Dan Kovenock|
|Publication Date:||March 2008|
|Keyword(s):||Alliance formation puzzle, budget constraints, military conflict|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=6741|
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.