Conflict Over Transnational River Resources: An Applied Game Theoretic Analysis

Andrew Beckmann ()
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Andrew Beckmann: University of Hawai'i and the East West Center

No 201806, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: This paper presents a game theoretic model to analyze transnational river resource conflicts such as the Indus River Basin conflict between Pakistan and India. The model demonstrates that to obtain a share of the river resources from the upstream country downstream, the downstream country must purchase costly armaments to threaten an invasion. Yet in this process, the upstream country has a significant first-mover advantage in extracting the river resource as it can internalize the threat of invasion and prevent it from happening in the non-invasion equilibrium "Peace with Threat of War". When the upstream country does not internalize the threat of invasion from the downstream country, the invasion equilibrium "War" occurs. This paper discusses the implications of each equilibria in the model within the context of the Indus River Basin conflict. This paper also discusses the possibility of Pareto-improving cooperative outcomes by imposing new institutional frameworks.

Keywords: India; Indus River Basin; International Conflict; Pakistan; Third-Party Arbitration; Transnational River (search for similar items in EconPapers)
JEL-codes: F51 F55 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-gth
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http://www.economics.hawaii.edu/research/workingpapers/WP_18-06.pdf First version, 2018 (application/pdf)

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