Modeling the Caspian Sea Negotiations

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.

Moral Entitlements and Aspiration Formation in Asymmetric Bargaining: Experimental Evidence from Germany and China

“…Yet, negotiated outcomes are not statistically different across countries. 37 We do find differences between both countries with regard to the bargaining process as such. Negotiations in CHI last weakly significantly longer than in GER.…”

“…Therefore, absolute concessions can be normalized by the current bargaining area, which is given by the difference between the standing proposals of both negotiation partners. The summary statistic "average positive relative concession" (APRC) of a negotiator is the average of all his relative positive concessions made during the bargaining 37 All p ≥ 0.340, MWU, strong and weak German groups vs. the respective Chinese groups. No significant differences in outcomes across countries have been found either, for instance, between Austria and Japan by [63] in Coalition Formation Ultimatum Games nor by [64] between the Netherlands, Spain, the US, and Japan in public-goods games.…”

“…Only in very special cases does the application of equity norms give rise to equal divisions. Focal points based on equity concerns have been shown to influence the resolution of economic distribution conflicts in real-life situations like international business negotiations (e.g., [35]), international trade negotiations (e.g., [36]), and international negotiations on resource allocations (e.g., [37]), but also in lab experiments (e.g., [21,33]). A common finding in these studies is that an agreement becomes more difficult if each partner is biased towards the focal point that favors him or her (see also [38]).…”

Application�of�multi�attribute�decision�making�methods�to�resources�allocation�problems�

“…Oil and gas infrastructure in the Caspian Sea [6] The last legal status of the Caspian was immediately disputed, and no division of the waters or the seabed has been agreed upon to date. In addition to the important strategic issues associated with the stalemate, energy prices are rising and the consequences of having no agreement are mounting [7]. These five states have been unable to find a solution that allows them all to exploit the sea's resources.…”

“…These ways are denoted as C, Dm, De, Ds, DC [7]: It should be mentioned that "Equal Division" indicates equal area and does not mean equal shares in the sources. Table 1 shows the ordinal preferences orderings of the states over the alternatives and their relative weights [7], [8]. The general objective of this study is to select the most appropriate legal status of the Caspian Sea among a set of alternatives.…”