Can Issue Linkage Help Mitigate Externalities and Enhance Cooperation?
International Game Theory Review 14 (1): 39-59
25 Pages Posted: 11 Oct 2012 Last revised: 20 Jun 2013
Date Written: June 15, 2011
Managing transboundary river basins is never easy and usually involves conflicts. This paper introduces a special class of games with externalities and issue linkage to promote cooperation on transboundary water resources. The paper analyzes whether issue linkages can be used as a form of negotiations on sharing benefits and mitigating conflicts. It is shown that whenever opportunities for linkages exist, countries may indeed contribute towards cooperation. In particular, if the linked games are convex, the grand coalition is the only optimal level of social welfare.
Keywords: games with externalities, convexity, s-core, transboundary rivers, issue linkage, international water sharing agreement
JEL Classification: C71, C72, D62
Suggested Citation: Suggested Citation