Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2020-04-04
Number: 20-016/II
Author-Name: Rene van den Brink
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Saish Nevrekar
Author-Workplace-Name: Universidad Carlos III de Madrid
Title: Peaceful Agreements to Share a River
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.
Classification-JEL: C78, D62, D74, Q25
Keywords: River sharing, peaceful agreement, contest success function, subgame perfect equilibrium
File-URL: https://papers.tinbergen.nl/20016.pdf
File-Format: application/pdf
File-Size: 380661 bytes
Handle: RePEc:tin:wpaper:20200016