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External pressure on alliances : what does the prisoners' dilemma reveal?
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Binner, Jane, Fletcher, Leslie, Kolokoltsov, V. N. (Vasiliĭ Nikitich) and Ciardiello, Francesco (2013) External pressure on alliances : what does the prisoners' dilemma reveal? Games , Volume 4 (Number 4). pp. 754-775. doi:10.3390/g4040754
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Official URL: http://dx.doi.org/10.3390/g4040754
Abstract
Prompted by a real-life observation in the UK retail market, a two-player Prisoners’ Dilemma model of an alliance between two firms is adapted to include the response of a rival firm, resulting in a version of a three-player Prisoners’ Dilemma. We use this to analyse the impact on the stability of the alliance of the rival’s competition, either with the alliance or with the individual partners. We show that, while strong external pressure on both partners can cause Ally-Ally to become a Nash equilibrium for the two-player Prisoners’ Dilemma, weak or asymmetric pressure that plays on the partners’ differing objectives can undermine the alliance. As well as providing new insights into how allies should respond if the alliance is to continue, this also illustrates how a third party can most effectively cause the alliance to become unsustainable. We create a new game theoretic framework, adding value to existing theory and the practice of alliance formation and sustainability.
| Item Type: | Journal Article | ||||||||
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| Subjects: | H Social Sciences > HF Commerce Q Science > QA Mathematics |
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| Divisions: | Faculty of Science > Statistics | ||||||||
| Library of Congress Subject Headings (LCSH): | Prisoner's dilemma game, Strategic alliances (Business) -- Mathematical models | ||||||||
| Journal or Publication Title: | Games | ||||||||
| Publisher: | M D P I AG | ||||||||
| ISSN: | 2073-4336 | ||||||||
| Official Date: | 10 December 2013 | ||||||||
| Dates: |
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| Volume: | Volume 4 | ||||||||
| Number: | Number 4 | ||||||||
| Page Range: | pp. 754-775 | ||||||||
| DOI: | 10.3390/g4040754 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Open Access | ||||||||
| Funder: | Sweden. Vetenskapsrådet [Research Council] | ||||||||
| Grant number: | 2009-20474-66896-29 (SRC) |
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