Alliances in the Shadow of Conflict
Lingnan (University) College, Sun Yat-sen University
Kai A. Konrad
Max Planck Institute for Tax Law and Public Finance; Social Science Research Center Berlin (WZB); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)
Max Planck Institute for Tax Law and Public Finance
Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2012-03
Victorious alliances often fi ght about the spoils of war. We consider experimentally when members of victorious alliances accept a peaceful division of the spoils, and when they fi ght against each other, and how the inability to commit to a peaceful division affects their effort contributions in their fi ght against a common enemy. First, we find that an asymmetric split of the prize induces a higher likelihood of internal fi ght and, in turn, reduces the effort contributions in the fight against a joint enemy. Second, non-binding declarations on how to divide the spoils in case of victory do not help to mitigate the hold-up problem.
Number of Pages in PDF File: 41
Keywords: Conflict, contest, alliance, hold-up problem, experiment
JEL Classification: D72, D74working papers series
Date posted: March 26, 2012 ; Last revised: July 4, 2012
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