This paper tests the insiders’ dilemma hypothesis in a laboratory experiment. The insiders’ dilemma means that a profitable merger does not occur, because it is even more profitable for each firm to unilaterally stand as an outsider (Stigler, 1950; Kamien and Zang, 1990, 1993). The experimental data provides support for the insiders’ dilemma, and thereby for endogenous rather than exogenous merger theory. More surprisingly, our data suggests that fairness (or relative performance) considerations also make profitable mergers difficult. Mergers that should occur in equilibrium do not, since they require an unequal split of surplus.

Most multilateral bargaining models predict bargaining power to emanate from pivotality—a party’s ability to form different majority coalitions. However, this prediction contrasts with the empirical observation that negotiations in parliamentary democracies typically result in payoffs proportional to parties’ vote shares. Proportionate profits suggest equality rather than pivotality drives results. We design an experiment to study when bargaining outcomes reflect pivotality versus proportionality. We find that commitment timing is a crucial institutional factor moderating bargaining power. Payoffs are close to proportional if bargainers can commit to majority coalitions before committing to how to share the pie, but pivotality dictates outcomes otherwise. Our results help explain Gamson’s Law, a long-standing puzzle in the legislative bargaining literature.

Coalition governments prevail at the European subnational level. Although some studies explain the formation of subnational government coalitions, we know little about the determinants of individual parties' likelihood of joining such coalitions. This article aims to fill this gap in empirical and theoretical ways. It shows that an important institutional constraint matters for political actors' strategies when forming subnational coalitions: the party affiliation of the directly elected head of the executive. Being the party of the head of the executive or being ideologically close to that party significantly increases a party's likelihood of joining a coalition. The empirical evidence results from multinomial choice models using a novel data set on subnational parties' likelihood of joining 92 coalition governments at the local level in Germany between 1999 and 2016. The findings have substantive implications for subnational institutional settings resembling ‘mixed’ political systems (i.e. neither purely presidential nor purely parliamentarian).

To negotiate conflict and navigate status hierarchy, individuals in many species form coalitions. We describe inter-personal conflicts and assess theories of coalition formation in a small-scale human society. Based on longitudinal and cross-sectional social network analysis of men in two communities of Tsimane forager–horticulturalists, we find evidence of reciprocity in coalitional support, as well as evidence of transitivity: an ally of my ally is likely to become my ally. We find mixed support for coalition formation between individuals who share a common adversary. Coalition formation was also predicted by food- and labour-sharing and especially by kinship. Physically formidable men and men higher in informal status were more likely to provide coalitional support over time; evidence was mixed that they receive more coalitional support. The highest status men are hubs of a dense coalitional support network that indirectly link all men in the community. These findings suggest that male coalition formation is multiply motivated, and in general reveals the political dynamics that structure men's lives in small, relatively egalitarian communities.

We apply variations and extensions of structural balance theory to analyze the dynamics of geopolitical relations using data from the virtual world Eve Online. The highly detailed data enable us to study the interplay of alliance size, power, and geographic proximity on the prevalence and conditional behavior of triads built from empirical political alliances. Through our analysis, we reveal the degree to which the behaviors of players conform to the predictions of structural balance theory and whether our augmentations of the theory improve these predictions. In addition to studying the time series of the proportions of triad types, we investigate the conditional changes in triad types and the formation of polarized political coalitions. We find that player behavior largely conforms to the predictions of a multipolar version of structural balance theory that separates strong and weak configurations of balanced and frustrated triads. The high degree of explanatory power of structural balance theory in this context provides strong support for both the theory and the use of virtual worlds in social science research.

European mainstream right parties are increasingly choosing to include radical right parties in coalition governments or other types of stable and committed cooperation. How does this cooperation affect voters’ perceptions of party positions? This article examines whether coalition signals have a significant impact on voters’ perceptions of the specific policy issues that were at stake in the bargaining process. More specifically, does the issue ownership of the radical right cause voters to perceive mainstream parties as radicalizing on immigration issues pertaining to asylum and multiculturalism? I compare the perceptions of Dutch parties before and after two coalition formations that (formally and informally) involved a radical right party: the coalition with the List Pim Fortuyn in 2002 and the support agreement with the Freedom Party in 2010. Furthermore, I examine the long-term effects of the Danish mainstream right government's reliance on the support of the radical right Danish People's Party in 2001–11.