Jérôme Dollinger (CORE)

will give a presentation on

 "Alliances and Technological Partnerships in Contests".

Abstract

" This paper analyses the formation of alliances and technological partnerships in contests. Alliances enhance the probability of winning at the cost of sharing the prize if won, while technological partnerships reduce the marginal cost of the effort invested in the contest by the members. When the players cannot form technological partnerships, no alliances is stable in the long run.

I extend the concept of contractual stability by allowing technological partners to prevent the formation of new alliances. It is found that the pair of grand coalitions, where all the players form one unique alliance and technological partnership, is stable. However, it is restrictive to enable some players that are not directly involved in the formations of new coalitions to cancel these formations. To circumvent this limitation, I proposed a stability notion where the non-deviating players can issue a veto regarding the formation of new alliances. If the vetoes are ignored, the deviating players can be excluded from their technological coalition. The pairs of grand coalitions remain stable, provided that the technological partnerships are sufficiently intense. These findings suggest that the formation of technological partnerships facilitates the formation of alliances in contests. In particular, the formation of the grand alliance, where there is no more contest between the players, can be stable in the long run. "