The Alliance Formation Puzzle and Capacity Constraints
WZB Markets and Politics Working Paper No. SP II 2008-07
9 Pages Posted: 26 Aug 2010
Date Written: February 1, 2008
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.
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