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Contractually stable alliances

Author

Listed:
  • MAULEON, Ana

    (CEREC, Saint-Louis University, Brussels, Belgium; Université catholique de Louvain, CORE, Belgium)

  • SEMPERE-MONERRIS, Jose

    (Department of Economic Analysis and ERI-CES, University of Valencia, Spain; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)

  • VANNETELBOSCH, Vincent

    (CEREC, Saint-Louis University, Brussels, Belgium; Université catholique de Louvain, CORE, Belgium)

Abstract

We analyze how different rules for exiting an alliance (simple majority, unanimity or unanimity with side payments) will affect the formation of strategic alliances. We find that no alliance structure is contractually stable under the simple majority rule. Once unanimous consent is required, asymmetric alliance structures consisting of two alliances are contractually stable. In addition, the grand alliance which is the efficient structure is stable. Allowing for side payments to compensate former partners improves efficiency. Finally, we show that different rules of exit may coexist in different alliances in the long run.

Suggested Citation

  • MAULEON, Ana & SEMPERE-MONERRIS, Jose & VANNETELBOSCH, Vincent, 2013. "Contractually stable alliances," LIDAM Discussion Papers CORE 2013031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2013031
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    References listed on IDEAS

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    Cited by:

    1. Mauleon, Ana & Roehl, Nils & Vannetelbosch, Vincent, 2018. "Constitutions and groups," Games and Economic Behavior, Elsevier, vol. 107(C), pages 135-152.
    2. Jérôme Dollinger & Ana Mauleon & Vincent Vannetelbosch, 2024. "R &d and market sharing agreements," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(3), pages 877-922, November.
    3. Mauleon, Ana & Sempere-Monerris, Jose J. & Vannetelbosch, Vincent, 2023. "R&D network formation with myopic and farsighted firms," Journal of Economic Behavior & Organization, Elsevier, vol. 208(C), pages 203-229.
    4. Ana Mauleon & Jose J. Sempere-Monerris & Vincent Vannetelbosch, 2023. "Limited Farsightedness in R &D Network Formation," Dynamic Games and Applications, Springer, vol. 13(2), pages 549-565, June.

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    More about this item

    Keywords

    strategic alliances; coalition formation; contractual stability; exit rules;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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