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1 econstor Make Your Publication Visible A Service of Wirtschaft Centre zbwleibniz-informationszentrum Economics Ke, Changxia; Konrad, Kai A.; Morath, Florian Working Paper Alliances in the shadow of conflict WZB Discussion Paper, No. SP II Provided in Cooperation with: WZB Berlin Social Science Center Suggested Citation: Ke, Changxia; Konrad, Kai A.; Morath, Florian (2012) : Alliances in the shadow of conflict, WZB Discussion Paper, No. SP II This Version is available at: Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

2 Changxia Ke Kai A. Konrad Florian Morath Alliances in the Shadow of Conflict Discussion Paper SP II February 2012 Social Science Research Center Berlin (WZB) Research Area Markets and Politics Research Professorship & Project The Future of Fiscal Federalism

3 Wissenschaftszentrum Berlin für Sozialforschung ggmbh Reichpietschufer Berlin Germany Copyright remains with the author(s). Discussion papers of the WZB serve to disseminate the research results of work in progress prior to publication to encourage the exchange of ideas and academic debate. Inclusion of a paper in the discussion paper series does not constitute publication and should not limit publication in any other venue. The discussion papers published by the WZB represent the views of the respective author(s) and not of the institute as a whole. Affiliation of the authors other than WZB: Changxia Ke Max Planck Institute for Tax Law and Public Finance MPI for Tax Law and Public Finance, Marstallplatz 1, Munich, Germany Kai A. Konrad WZB and Max Planck Institute for Tax Law and Public Finance MPI for Tax Law and Public Finance, Marstallplatz 1, Munich, Germany Florian Morath WZB and Max Planck Institute for Tax Law and Public Finance MPI for Tax Law and Public Finance, Marstallplatz 1, Munich, Germany

4 Abstract Alliances in the Shadow of Conflict Changxia Ke, Kai A. Konrad and Florian Morath * 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. Keywords: Conflict, contest, alliance, hold-up problem, experiment JEL classification: D72, D74 * We thank MELESSA of the University of Munich for providing laboratory resources and Nina Bonge, Bernhard Enzi, and Verena Hefner for research assistance. Financial support from the German Research Foundation (DFG, grant no. SFB-TR-15) is gratefully acknowledged.

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