I'm curious about the folllowing question, maybe some armchair economists (or sociologists) can comment:

Does the marginal advantage of an airline joining an alliance increase with the number of airlines already participating in the program, or decrease as more and more join?

Personally, I have two lines of thought -- first, given a finite number of airlines, if you were to divide the pie in half for example (or almost in half), it would be very important for an new airline to join one of them. I.e. anyone not belonging to one of the halves is at a great disadvantage.

On the other hand, each member of the alliance must offer increased services to passengers -- which may or may not outweigh the advantage of joining in the first place.
So, is it better for an airline to join an alliance when small, or large? Is there a size at which an alliance begins to defeat the purpose for which they were created?

Complicated -- just wondering if anyone else has thoughts on this?

For an airline joining an alliance, the larger the alliance already is, the better, because that will mean more additional customers flying them because of the alliance.

For airlines in the alliance I think that the larger the alliance the less the benefit of each new airline joining because of more partners to share the additional passengers with, but there should still be a benefit, however small, for each new partner.

The benefits to all the airlines should increase if they maintain quality and the new partners' routes do not overlap with existing partners' routes. The core business may not change but they would get additional benefits with connecting passengers. An additional 10 or 20% of traffic could be significant to the bottom line.