Brothers in Arms - An Experiment on the Alliance Puzzle

39 Pages Posted: 30 Dec 2010 Last revised: 31 Oct 2011

See all articles by Changxia Ke

Changxia Ke

Lingnan (University) College, Sun Yat-sen University

Kai A. Konrad

Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Florian Morath

Goethe University Frankfurt; Max Planck Institute for Tax Law and Public Finance

Multiple version iconThere are 3 versions of this paper

Date Written: January 2011

Abstract

Our experimental analysis of alliances in conflicts leads to three main findings. First, even in the absence of repeated interaction, direct contact or communication, free-riding among alliance members is far less pronounced than what would be expected from non-cooperative theory. Second, this possible solidarity among "brothers in arms" when fighting against an outside enemy may rapidly deteriorate or disappear as soon as the outside enemy disappears. Third, when fighting an outside enemy, "brothers in arms" may already anticipate future internal conflict about dividing the spoils of winning; however, this subsequent internal conflict does not discourage alliance members from expending much effort in the contest against the external enemy.

Keywords: Alliance, conflict, contest, free-riding, hold-up problem, solidarity

JEL Classification: D72, D74

Suggested Citation

Ke, Changxia and Konrad, Kai A. and Morath, Florian, Brothers in Arms - An Experiment on the Alliance Puzzle (January 2011). Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2011-04. Available at SSRN: https://ssrn.com/abstract=1731828 or http://dx.doi.org/10.2139/ssrn.1731828

Changxia Ke

Lingnan (University) College, Sun Yat-sen University ( email )

135 Xingang Xi Road
Guangzhou, Guangdong 510275
China

Kai A. Konrad (Contact Author)

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/home.cfm

Centre for Economic Policy Research (CEPR)

90-98 Goswell Road
London, EC1V 7RR
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, 53072
Germany

Florian Morath

Goethe University Frankfurt ( email )

Gr├╝neburgplatz 1
Frankfurt am Main, 60323
Germany

Max Planck Institute for Tax Law and Public Finance ( email )

Marstallplatz 1
Munich, 80539
Germany

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