The role of noise in alliance formation and collusion in conflicts

Boudreau, James W.; Sanders, Shane; Shunda, Nicholas

doi:10.1007/s11127-018-0564-y

Cited by 7 publications

(4 citation statements)

References 28 publications

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“…Finally, incentives for and conditions under which the sponsors with partially aligned interests would choose to form an alliance are identified. Boudreau et al (2018b) consider the influence of noise in conflicts involving the related elements of alliance formation and collusion. When noise is modeled as an exponential parameter in the contest success function (see, e.g., Nti 1999), the study finds that alliance formation can raise the expected payoffs to allied parties above those received in the case of no alliance.…”

Section: Methodologies and Findings Of Articles Included In This Specmentioning

confidence: 99%

Strategic and experimental analyses of conflict and terrorism

Mathews

Sanders

2018

Public Choice

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Understanding the root causes of conflict and terrorism ultimately will allow policymakers to enact measures to reduce violence's associated costs. This special issue on "Strategic and Experimental Approaches to the Study of Conflict and Terrorism" consists of papers that analyze issues related to conflict or terrorism using the tools of applied game theory or experimental economics. This introductory article provides an overview of, and explains the relationships between, the studies included in the special issue.

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Section: Methodologies and Findings Of Articles Included In This Specmentioning

confidence: 99%

Strategic and experimental analyses of conflict and terrorism

Mathews

Sanders

2018

Public Choice

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“…There is substantial empirical evidence that positional concerns influence consumption behavior (see, e.g., Luttmer [16]; Heffetz [18]; Kosicki [19]; 20 Easterlin [20]; Clark and Oswald [21]; Kagel, Kim, and Moser [22]; Oswald [23]; Sanders [24]; Damianov and Sanders [25]. Furthermore, Luttmer [16], Easterlin [20] found evidence that positional spending contests lead to large welfare losses due to the imposition of external (positional spending) costs For related work on rent dissipation from spending contests, see, e.g., Boudreau, Rentschler, and Sanders [26], 27 Boudreau, Sanders, and Shunda [27], or Boudreau et al [28]. In the limit of participation, these costs can erode most of the positional value being conferred by the status contest.…”

Section: Introductionmentioning

confidence: 99%

Environmental Status Goods and Market-Based Conservation: An Arm of Ostrom’s Polycentric Approach?

Sanders

2023

Sustainability

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Ostrom suggests that collective action problems may present an obstacle to the reduction in (external costs from) global greenhouse gas emissions and that a polycentric approach is necessary to find a solution. A market-based prong of such a polycentric solution—alongside, e.g., governance-based prongs such as transferable pollution permits—may lie in the nature of certain salient “environmentally friendly” goods (e.g., Toyota Prius, Tesla cars, home solar panels). The present study analyzes the social welfare consequences of positional conservation (i.e., consumption of salient environmentally friendly goods for the purpose of status signaling) within a choice theoretic model. For example, the Toyota Prius and Tesla have been shown to be such a type of good. In a two-good model of strategic consumer choice, in which consumers choose between a positional, “conservation good” and an externally costly, “non-conservation good”, we find that positional conservation improves social welfare if the unit external cost of the non-conservation good consumption is sufficiently large. In such a case, positionality serves to (partly or fully) correct an under-consumption of the positional good. Fershtman and Weiss find, within a one-good (action) model, that positionality can be corrective of distortions from positive externalities but not of distortions from negative externalities (e.g., pollution). Within a two-good model of consumer choice, we find that “social rewards” can help to correct distortions generated by negative externalities and improve social welfare. The results of the present study suggest that the Paretian objective may not be to curb positional spending but to shift positional spending toward conspicuous goods that are otherwise under-consumed (e.g., conservation goods or education).

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“…Moreover, Ke, Konrad, and Morath [5] find experimental evidence of puzzling alliance formation in contest, and Beekman, Cheung, and Levely [6] explore conditions for cooperation within contest environments. Assuming exogenous prize-sharing between allies, the puzzle emerges from a bi-lateral free-ridership problem among allies, whereby a party's marginal benefit of input allocation decreases in number of allied arms allocated (see, e.g., [7][8][9][10][11][12]). This problem causes an under-allocation of arms by an alliance that, in turn, creates a loss of expected payoff and of victory likelihood among allies.…”

Section: Introductionmentioning

confidence: 99%

The alliance formation puzzle in contests with capacity-constraints: A test using American football reception-coverage contest data

2020

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We utilize a contest-theoretic model to demonstrate a version of the alliance formation puzzle that aligns with reception-coverage contests in American football. Namely, secondary defenders can opt for single-coverage-1 v 1 contest. Alternatively, they can choose to ally -form double-coverage or 2 v 1 contest with exogenous intra-alliance prize division-when defending a given receiver. In our theoretical treatment, we find that defenses have a lower equilibrium success rate in preventing the receiver from "getting open" under double-coverage than under single-coverage in the absence of capacity constraints. We also find that this success rate paradox is a necessary condition for the alliance formation puzzle. We then test the theoretical treatment by analyzing 8,508 plays of NCAA and NFL game data within a set of fixed effects, logistic regression models that control for receiver, level-of-play, and season-of-play. We find that equilibrium level of defensive success rises significantly and substantially (p-value < 0.01 and marginal effect of between 13 and 17 percentage points) when moving from single-coverage to double-coverage, ceteris paribus. There is strong evidence that the necessary condition for the alliance formation puzzle does not hold in this setting. We conclude that sufficiently-binding physiological and training-based capacity constraints eliminate the alliance formation puzzle in this setting, as was shown theoretically by Konrad and Kovenock (2009). This empirical result suggests that other contest settings that regularly feature alliance, such as liquidity-constrained conflict, may not be puzzling.

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The role of noise in alliance formation and collusion in conflicts

Cited by 7 publications

References 28 publications

Strategic and experimental analyses of conflict and terrorism

Strategic and experimental analyses of conflict and terrorism

Environmental Status Goods and Market-Based Conservation: An Arm of Ostrom’s Polycentric Approach?

The alliance formation puzzle in contests with capacity-constraints: A test using American football reception-coverage contest data

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