External Threat, Internal Rivalry, and Alliance Formation

History reveals enemies often ally to confront a common threat. In such competitive coalitions actors must balance the simultaneous risk of distrust of their ally against external danger. We model this interactive relationship and generate several novel outcomes. Intra-alliance rivalry forces allying players to preemptively commit more resources to conflict and to free ride less. Consequently, their likelihood of conflict success increases. However, intra-alliance instability forces weaker players to commit a higher proportion of resources to fighting than do their stronger allies. This outcome runs contrary to Mancur Olson's classic collective action result that the "small exploit the great." Furthermore, allies do not demonstrate a uniform preference for bandwagoning or balancing. In general, it is preferable to bandwagon with friends but to balance with enemies. Finally, because rivalry can raise alliance payoffs, actors may rationally seek out risky partnerships with so-called enemies rather than molding more certain alliances with friends.