Competitive Alliance Formation

Abstract

Two great powers compete for concessions from two smaller countries by allocating a fixed amount of support between them. The incumbent moves first, announcing how she will distribute support as a function of the countries' policies, followed by the entrant. The incumbent must design a doctrine robust to the entrant's attempts to induce defections, exploiting the fact that the entrant risks overcommitting support to lure one country away---thereby leaving the other open for the incumbent to secure concessions. A strong incumbent can deter both countries from conceding, whereas a weaker one must concentrate support on a single country and forgo the other. When the incumbent’s strength is sufficiently low, her strategy changes logic: instead of deterring defections, she offers an outside option to countries deviating from the entrant’s doctrine.