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 ISSN 2073-4336.
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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 |
|---|---|
| Subjects: | H Social Sciences > HF Commerce Q Science > QA Mathematics |
| Divisions: | Faculty of Science, Engineering and Medicine > 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: | Date Event 10 December 2013 Published 18 November 2013 Accepted 15 September 2013 Submitted |
| 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 (Creative Commons open licence) |
| Date of first compliant deposit: | 27 December 2015 |
| Date of first compliant Open Access: | 27 December 2015 |
| Funder: | Sweden. Vetenskapsrådet [Research Council] |
| Grant number: | 2009-20474-66896-29 (SRC) |
| URI: | https://wrap.warwick.ac.uk/60389/ |
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