Alliances in the shadow of conflict

Abstract

Victorious alliances often fight about the spoils of war. We consider experimentally when members of victorious alliances accept a peaceful division of the spoils, and when they fight against each other, and how the inability to commit to a peaceful division affects their effort contributions in their fight against a common enemy. First, we find that an asymmetric split of the prize induces a higher likelihood of internal fight and, in turn, reduces the effort contributions in the fight against a joint enemy. Second, non-binding declarations on how to divide the spoils in case of victory do not help to mitigate the holdup problem. (author's abstract)