When there are three parties, instability problems brought about by the emptiness of the core of the corresponding cooperative game may cause the Coase Theorem to fail, even when other more direct impediments to bargaining are low. We show that the standard Coasean bargaining game involving...

This paper examines the problem of the formation of alliances in conflict and, more generally, in contests with three players. Each player possesses an exogenous strategic endowment (e.g., arms, efforts, rent-seeking activity). The outcome of contests, including those between any alliances of...