Changing Games and Evolving Contexts: Political Bargaining in European Energy Disputes

Abstract:     
Game theory fails to adequately account for an evolving context which can affect the preferences of disputing actors, an issue which the author find to be likely to systematically produce inaccurate explanations and predictions. Empirical evidence is presented that supports the claim that the start of recent natural gas crises has damaged the GDP growth of 9 external European countries. A Pooled Panel Nonlinear Auto Regressive Conditional Heteroskedasticity (PP-NARCH) model and Box-Tiao intervention models are selected to support the validity of what is defined as a ‘Fully-Fuzzy’ (FF) game. The findings presented here are then enriched with a summary of the most relevant statements, agreements, and partnerships which are likely to have exerted pressure on Russia and the other negotiating country.

Keywords: energy security, bargaining theory, fully-fuzzy game, natural gas

JEL Classification: N7

Accepted Paper Series