Abstract
This paper focuses on humanity’s supposedly irrational behavior in conflict decision-making, challenging two rationalist puzzles in political science and economics: war’s inefficiency and alliance formation. More specifically, we ask whether alliances can benefit the allies. Standard Tullock contest alliances are plagued by free riding, undermining successful collective action. In a three-party contest environment when two of the parties ally, input substitution and fixed prize division hinder collective action. Analyzing the same contest with input-cost complementarity and proportional prize division, we propose a transformative solution that avoids the usual problems of alliance formation and stability. While input-cost complementarity partially mitigates those concerns, a proportional prize-sharing agreement offers a comprehensive remedy, ensuring equitable contributions and gains for the allied parties. The proposed approach not only resolves the alliance-formation puzzle but also enhances the allies’ prospects for success.
Original language | English (US) |
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Journal | Public Choice |
DOIs | |
State | Accepted/In press - 2024 |
Keywords
- Alliance formation puzzle
- Collective action
- Contests
- NATO
- Resource conflict
ASJC Scopus subject areas
- Sociology and Political Science
- Economics and Econometrics