Since the 1960s Olson-Zeckhauser's (1966) analysis, its 'exploitation of the great by the small' has provided economists' core model of alliance's provision of security/defense. But with the end of the Cold War, countries' allocative behavior has diverged markedly from OZ's predictions for...

This paper develops a model of economic protection against random emergency costs. To mitigate the effects of these disruptions, each country creates a private mutual insurance market and provides voluntarily an international public good. We will explore how protection through voluntary...