IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/1504.html
   My bibliography  Save this paper

Bargaining Practice and Negotiation Failure in Russia-Ukraine Gas Relations

Author

Listed:
  • David Tingle

Abstract

What causes ‘gas wars’ between Russia and Ukraine? In this paper I argue that contract disputes in the eastern European gas sector are specific instances of a broader set of phenomena: bargains over strategically important resource issues outside of any international framework to facilitate cooperation. Non cooperative game theory helps to shed light on the reasons we see crises emerge despite the fact that both parties would be better off reaching an agreement short of conflict. I develop a framework for crisis bargaining that departs from canonical games in one important dimension: it explicitly considers impact of bargaining practices and strategies on the negotiation process and the probability of failure. While bargaining practices are endogenous to both the preferences of the players and the structure of the game, they intervene in the causal process in substantively important ways by modifying the effect of both preferences and structure. Critically, practices embedded in earlier rounds affect practices and outcomes later on independent of the preferences of each player or the structure of the game. I use this practice-theoretic bargaining framework to develop an in-depth case study of 2008 negotiations between Russia and Ukraine. This framework helps produce a nuanced understanding of bargaining breakdown that led to the most damaging of the ‘gas wars’; the resulting explanation outperforms the standard bargaining model as well as a number of competing arguments.

Suggested Citation

  • David Tingle, 2015. "Bargaining Practice and Negotiation Failure in Russia-Ukraine Gas Relations," Cambridge Working Papers in Economics 1504, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:1504
    as

    Download full text from publisher

    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1504.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rubinstein, Ariel, 1985. "A Bargaining Model with Incomplete Information about Time Preferences," Econometrica, Econometric Society, vol. 53(5), pages 1151-1172, September.
    2. Powell, Robert, 1996. "Bargaining in the Shadow of Power," Games and Economic Behavior, Elsevier, vol. 15(2), pages 255-289, August.
    3. Slantchev, Branislav L., 2003. "The Power to Hurt: Costly Conflict with Completely Informed States," American Political Science Review, Cambridge University Press, vol. 97(1), pages 123-133, February.
    4. Mo, Jongryn, 1995. "Domestic Institutions and International Bargaining: The Role of Agent Veto in Two-Level Games," American Political Science Review, Cambridge University Press, vol. 89(4), pages 914-924, December.
    5. Pouliot, Vincent, 2008. "The Logic of Practicality: A Theory of Practice of Security Communities," International Organization, Cambridge University Press, vol. 62(2), pages 257-288, April.
    6. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    7. Pelc, Krzysztof J., 2010. "Constraining Coercion? Legitimacy and Its Role in U.S. Trade Policy, 1975–2000," International Organization, Cambridge University Press, vol. 64(1), pages 65-96, January.
    8. Schmidt, Sebastian, 2014. "Foreign Military Presence and the Changing Practice of Sovereignty: A Pragmatist Explanation of Norm Change," American Political Science Review, Cambridge University Press, vol. 108(4), pages 817-829, November.
    9. Simmons, Beth A., 2000. "International Law and State Behavior: Commitment and Compliance in International Monetary Affairs," American Political Science Review, Cambridge University Press, vol. 94(4), pages 819-835, December.
    10. Helen V. Milner & B. Peter Rosendorff, 1997. "Democratic Politics and International Trade Negotiations," Journal of Conflict Resolution, Peace Science Society (International), vol. 41(1), pages 117-146, February.
    11. Fearon, James D., 1994. "Domestic Political Audiences and the Escalation of International Disputes," American Political Science Review, Cambridge University Press, vol. 88(3), pages 577-592, September.
    12. Schultz, Kenneth A., 1998. "Domestic Opposition and Signaling in International Crises," American Political Science Review, Cambridge University Press, vol. 92(4), pages 829-844, December.
    13. Koremenos, Barbara & Lipson, Charles & Snidal, Duncan, 2001. "The Rational Design of International Institutions," International Organization, Cambridge University Press, vol. 55(4), pages 761-799, October.
    14. Branislav L. Slantchev & Ahmer Tarar, 2011. "Mutual Optimism as a Rationalist Explanation of War," American Journal of Political Science, John Wiley & Sons, vol. 55(1), pages 135-148, January.
    15. Drew Fudenberg & Jean Tirole, 1983. "Sequential Bargaining with Incomplete Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(2), pages 221-247.
    16. Kucik, Jeffrey & Reinhardt, Eric, 2008. "Does Flexibility Promote Cooperation? An Application to the Global Trade Regime," International Organization, Cambridge University Press, vol. 62(3), pages 477-505, July.
    17. Koremenos, Barbara, 2005. "Contracting around International Uncertainty," American Political Science Review, Cambridge University Press, vol. 99(4), pages 549-565, November.
    18. Rosendorff, B.P. & Milner, H., 1995. "Democratic Politics and International Trade Negociations: Elections and Divided Government as Constraints on Trade Liberalization," Papers 9511, Southern California - Department of Economics.
    19. Tomz, Michael, 2007. "Domestic Audience Costs in International Relations: An Experimental Approach," International Organization, Cambridge University Press, vol. 61(4), pages 821-840, October.
    20. Eagleton-Pierce, Matthew, 2012. "Symbolic Power in the World Trade Organization," OUP Catalogue, Oxford University Press, number 9780199662647.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Tyson Chatagnier, 2015. "Conflict bargaining as a signal to third parties," Journal of Theoretical Politics, , vol. 27(2), pages 237-268, April.
    2. Barbara Dluhosch & Nikolai Ziegler, 2011. "The paradox of weakness in the politics of trade integration," Constitutional Political Economy, Springer, vol. 22(4), pages 325-354, December.
    3. Oliver Westerwinter & Kenneth W. Abbott & Thomas Biersteker, 2021. "Informal governance in world politics," The Review of International Organizations, Springer, vol. 16(1), pages 1-27, January.
    4. Ana Carolina Garriga, 2009. "Regime Type and Bilateral Treaty Formalization," Journal of Conflict Resolution, Peace Science Society (International), vol. 53(5), pages 698-726, October.
    5. James Vreeland, 2006. "IMF program compliance: Aggregate index versus policy specific research strategies," The Review of International Organizations, Springer, vol. 1(4), pages 359-378, December.
    6. Jean-Pierre P. Langlois & Catherine C. Langlois, 2004. "Holding Out for Concession: The Quest for Gain in the Negotiation of International Agreements," International Interactions, Taylor & Francis Journals, vol. 32(3), pages 261-293, April.
    7. Xinyuan Dai, 2006. "Dyadic Myth and Monadic Advantage," Journal of Theoretical Politics, , vol. 18(3), pages 267-297, July.
    8. J. C. Sharman, 2007. "Rationalist and Constructivist Perspectives on Reputation," Political Studies, Political Studies Association, vol. 55(1), pages 20-37, March.
    9. Besir Ceka and Brian Burgo, 2014. "Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations," EUI-RSCAS Working Papers p0388, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    10. Leonardo Baccini, 2010. "Explaining formation and design of EU trade agreements: The role of transparency and flexibility," European Union Politics, , vol. 11(2), pages 195-217, June.
    11. Terrence L. Chapman, 2007. "International Security Institutions, Domestic Politics, and Institutional Legitimacy," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(1), pages 134-166, February.
    12. Jelnov, Artyom & Tauman, Yair & Zeckhauser, Richard, 2018. "Confronting an enemy with unknown preferences: Deterrer or provocateur?," European Journal of Political Economy, Elsevier, vol. 54(C), pages 124-143.
    13. Nakao, Keisuke, 2022. "Democratic Victory and War Duration: Why Are Democracies Less Likely to Win Long Wars?," MPRA Paper 112849, University Library of Munich, Germany.
    14. Xinyuan Dai, 2006. "The Conditional Nature of Democratic Compliance," Journal of Conflict Resolution, Peace Science Society (International), vol. 50(5), pages 690-713, October.
    15. Kjell Hausken, 1997. "Game-theoretic and Behavioral Negotiation Theory," Group Decision and Negotiation, Springer, vol. 6(6), pages 511-528, December.
    16. Gary Uzonyi & Matthew Wells, 2016. "Domestic institutions, leader tenure and the duration of civil war," Conflict Management and Peace Science, Peace Science Society (International), vol. 33(3), pages 294-310, July.
    17. Simon Schropp, Kornel Mahlstein, 2007. "The Optimal Design of Trade Policy Flexibility in the WTO," IHEID Working Papers 27-2007, Economics Section, The Graduate Institute of International Studies, revised Dec 2007.
    18. Kim, Jin Yeub, 2018. "Counterthreat of attack to deter aggression," Economics Letters, Elsevier, vol. 167(C), pages 112-114.
    19. Jin Yeub Kim, 2022. "Negotiation statements with promise and threat," Review of Economic Design, Springer;Society for Economic Design, vol. 26(2), pages 149-164, June.
    20. David P Byrne & Leslie A Martin & Jia Sheen Nah, 2022. "Price Discrimination by Negotiation: a Field Experiment in Retail Electricity [“Redistribution through Markets,”]," The Quarterly Journal of Economics, Oxford University Press, vol. 137(4), pages 2499-2537.

    More about this item

    Keywords

    gas ; bargaining ; Russia ; Ukraine;
    All these keywords.

    JEL classification:

    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1504. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.