Peaceful Agreements to Share a River

Tinbergen Institute Discussion Paper 2020-016/II

24 Pages Posted: 29 Apr 2020

See all articles by Rene van den Brink

Rene van den Brink

Vrije Universiteit Amsterdam, School of Business and Economics

Saish Nevrekar

Universidad Carlos III de Madrid

Date Written: March 31, 2020

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.

Keywords: River sharing, peaceful agreement, contest success function, subgame perfect equilibrium

JEL Classification: C78, D62, D74, Q25

Suggested Citation

van den Brink, Rene and Nevrekar, Saish, Peaceful Agreements to Share a River (March 31, 2020). Tinbergen Institute Discussion Paper 2020-016/II, Available at SSRN: https://ssrn.com/abstract=3568412 or http://dx.doi.org/10.2139/ssrn.3568412

Rene Van den Brink (Contact Author)

Vrije Universiteit Amsterdam, School of Business and Economics ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Saish Nevrekar

Universidad Carlos III de Madrid ( email )

Calle Madrid 126
Getafe, 28903
Spain

HOME PAGE: http://saishnevrekar.com

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