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Modeling the Caspian Sea Negotiations

Author

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  • Majid Sheikhmohammady

    (University of Waterloo)

  • D. Marc Kilgour

    (Wilfrid Laurier University)

  • Keith W. Hipel

    (University of Waterloo)

Abstract

The objective of this study is to identify techniques for predicting the outcome of a negotiation and then apply them to the current negotiations over the legal status of the Caspian Sea, which has been in dispute since the collapse of the Soviet Union. The five coastal states—Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan—entered negotiations in 1993, but have not yet agreed on who owns the waters or the oil and natural gas beneath them. We identify the five well-defined options for resolving the dispute and then discuss the states’ preferences regarding these options. We apply some well-known social choice rules to find the “socially optimal” resolution. Then we review several versions of Fallback Bargaining, which aims to minimize the maximum dissatisfaction of the bargainers, and apply them to the dispute. Finally, we represent the dispute in financial terms and apply several well-known bankruptcy procedures, which are fair division methods for settling monetary claims. We end with some suggestions on how the value of the Caspian seabed resources could be allocated among the five Caspian states.

Suggested Citation

  • Majid Sheikhmohammady & D. Marc Kilgour & Keith W. Hipel, 2010. "Modeling the Caspian Sea Negotiations," Group Decision and Negotiation, Springer, vol. 19(2), pages 149-168, March.
    • Handle: RePEc:spr:grdene:v:19:y:2010:i:2:d:10.1007_s10726-008-9121-2
    DOI: 10.1007/s10726-008-9121-2
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    References listed on IDEAS

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    1. Dagan, Nir & Volij, Oscar, 1993. "The bankruptcy problem: a cooperative bargaining approach," Mathematical Social Sciences, Elsevier, vol. 26(3), pages 287-297, November.
    2. Steven J. Brams & D. Marc Kilgour, 2001. "Fallback Bargaining," Group Decision and Negotiation, Springer, vol. 10(4), pages 287-316, July.
    3. Bilge Yilmaz & Murat R. Sertel, 1999. "The majoritarian compromise is majoritarian-optimal and subgame-perfect implementable," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(4), pages 615-627.
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