Abstract
We analyze a model of conflict with endogenous choice of effort, where subsets of the contenders may force the resolution to be sequential: First the alliance fights it out with the rest and – in case they win – later they fight it out among themselves. For three-player games, we find that it will not be in the interest of any two of them to form an alliance. We obtain this result under two different scenarios: equidistant preferences with varying relative strengths, and varying vicinity of preferences with equal distribution of power. We conclude that the commonly made assumption of super-additive coalitional worth is suspect.
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Esteban, J., Sákovics, J. Olson VS. Coase: Coalitional Worth in Conflict. Theory and Decision 55, 339–357 (2003). https://doi.org/10.1023/B:THEO.0000047490.12475.03
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DOI: https://doi.org/10.1023/B:THEO.0000047490.12475.03