Peaceful Agreements to Share a River

Rene van den Brink and Saish Nevrekar
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Rene van den Brink: Vrije Universiteit Amsterdam
Saish Nevrekar: Universidad Carlos III de Madrid

No 20-016/II, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper develops a model of conflict resolution over scarce water in a trans-boundary river. In our model, we consider countries that are located along a river and made a military investment. Given these investments and their location along the river, they sequentially bargain over the surplus of water, or decide to engage in a military conflict with their upstream neighbour. The probability of winning a military conflict is determined by a contest success function which depends on the military investments made before. We speak about a peaceful agreement if the countries rationally decide to bargain over the water instead of engaging into a military conflict. We show that, if all benefit functions are nonnegative, increasing and concave, then for every level of military investment, there always exists a peaceful agreement where every country prefers to bargain peacefully for the water. We provide a scenario that yields one such a peaceful agreement.

Keywords: River sharing; peaceful agreement; contest success function; subgame perfect equilibrium (search for similar items in EconPapers)
JEL-codes: C78 D62 D74 Q25 (search for similar items in EconPapers)
Date: 2020-04-04
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20200016

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