| Summary: | Approved for public release, distribution is unlimited === This thesis is a theoretical economics study of the formation of defense alliances. It discusses the probability that countries, which are characterized by both their perceptions about benefits and risks of alliance membership and the gross domestic product, form an alliance. Primarily, I created an alliance model with and without risk perceptions based on the joint product model and the self-protection model. Next, I examined the behavior of countries in the model. Finally, I considered the implications of the results. The characters of the countries may influence the alliance burden sharing and productivity of defense expenditure whose effects on the country's utilities influences the alliance formation.
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