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 |
JEL(s): | D72, D74 |
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.