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Alliances Among Asymmetric Countries

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  • Roy Chowdhury, Prabal

Abstract

We examine alliances between asymmetric countries. We find that the results depend on the nature of the equilibrium. If the equilibrium is an interior one then, with an increase in asymmetry, the level of the alliance-wide defense good decreases and the divergence between the first best and the equilibrium level of the defense good increases. In case the equilibrium involves a corner solution, these results are reversed though. It may be argued, however, that the interior equilibrium case is the more relevant one.

Suggested Citation

  • Roy Chowdhury, Prabal, 2006. "Alliances Among Asymmetric Countries," MPRA Paper 1502, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:1502
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    References listed on IDEAS

    as
    1. Weber, Shlomo & Wiesmeth, Hans, 1991. "Economic models of NATO," Journal of Public Economics, Elsevier, vol. 46(2), pages 181-197, November.
    2. Richard Cornes & Roger Hartley & Todd Sandler, 1999. "Equilibrium Existence and Uniqueness in Public Good Models: An Elementary Proof via Contraction," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(4), pages 499-509, October.
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    5. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
    6. Itaya, Jun-ichi & de Meza, David & Myles, Gareth D., 1997. "In praise of inequality: public good provision and income distribution," Economics Letters, Elsevier, vol. 57(3), pages 289-296, December.
    7. Todd Sandler & James C. Murdoch, 2000. "On sharing NATO defence burdens in the 1990s and beyond," Fiscal Studies, Institute for Fiscal Studies, vol. 21(3), pages 297-327, September.
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    More about this item

    Keywords

    Alliance; Asymmetry; Public good; Defence;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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