Coalitional Colonel Blotto Games with Application to the Economics of Alliances

In Borel’s Colonel Blotto game two players simultaneously allocate their respective endowments of a resource across n battlefields, the higher allocation wins each battlefield, and players maximize the number of battlefields won. Here we examine two players who may form an alliance before separately competing in two disjoint Colonel Blotto games against a common adversary. Despite a lack of common interests, unilateral transfers—in a direction consistent with the exploitation hypothesis—arise for a range of parameter configurations. Such transfers alter the adversary’s strategy and the combination of the direct and strategic effects benefits both allies.