The Conflict of Nagorno-Karabakh: Moving Towards Peace

Abstract

In this paper we discuss the conflict of Nagorno-Karabakh in the framework of game theory. Observing the current state of the conflict, we conclude that there is no sustainable or pure strategy equilibrium. The game is possible to solve for mixed strategies, based on maximizing expected payoffs of conflict parties. Then, we discuss how Armenia can prevent Azerbaijan to restart the war through a proper selection of policy components in its payoff structure. We argue that Armenia should be more active in international lobbying for Nagorno-Karabakh’s independence, as it will ultimately increase the probability of peaceful solution. The recent large-scale war, initiated by Azerbaijan in September 27th, 2020, can be a natural test for the suggested game structure and implied peacebuilding policies. According to the game, Azerbaijan will fail to resolve the conflict via military means despite of the on-going large-scale war and will be compelled to join the negotiations.

Keywords: Conflict, peaceful resolution, Armenia, Azerbaijan, Nagorno-Karabakh

JEL Classification: C70, D74, F51, N40