Date of Graduation
Eberly College of Arts and Sciences
Joe D Hagan
Scott R Crichlow
Energy has recently become a very important item on the political agenda of most Western countries; it is bound to be even more so in the future, due to the increasing scarcity of natural gas and oil. With Russia using the energy weapons to advance its economic and political goals, energy security has become a central topic in European politics. Important political bargaining models like game theory can offer valuable insights and contribute to the explanation of the outcome of important political confrontations like the ones between Russia and its former satellites. Game theory, however, fails to adequately account for an evolving context which can affect the preferences of the disputing actors, an issue which is likely to systematically produce inaccurate explanations and predictions. The relevance of the preferences of external actors will be demonstrated in this work by finding empirical evidence that the start of the dispute has damaged GDP and stock market performances of external players; in fact, this would give them a reason to become a relevant part of the game by exerting pressure on the two players so as to reach an agreement in the shortest time possible. The growing importance of external actors, I argue, needs to be modeled by game theory because, as it was especially the case for the Russia-Ukraine dispute in 2006, their role can be pivotal to in determining the duration and the outcome of the political bargaining. I select a Pooled Panel Nonlinear Auto Regressive Conditional Heteroskedasticity (PP-NARCH) model and Box-Tiao intervention models to support the validity of what I define a Fully-Fuzzy game. I rely more on the general message conveyed by the statistical models considered, thus freeing my analysis from the specificity of the model chosen for its better fit. My work, however, would be incomplete if simply finding empirical evidence of a negative effect of the gas disputes on the real growth of GDP and main stock markets of European countries. I summarize the most relevant statements, agreements, and partnerships which are likely to have exerted pressure on Russia and the other negotiating country.
Franch, Fabio, "Changing Games and Evolving Contexts: Political Bargaining In European Energy Disputes" (2010). Graduate Theses, Dissertations, and Problem Reports. 4591.