Iranian Journal of Economic Research

Possibility of Making Coalition among Iran, Azerbaijan and Turkmenistan for Exporting Natural Gas to Europe: a Game Theoretic Framework

Document Type : Research Paper

Authors

Amir Jafarzadeh 1
Abbas Shakeri 2
Farshad Momeni 3
Ghahraman Abdoli 4

1 Ph.D. in Economics, Allameh Tabataba`i University

2 Professor of Allameh Tabataba`i University

3 Associate Professor, Allameh Tabataba`i University

4 Associate Professor, Tehran University

Abstract
The following paper investigates European policy about importing natural gas from Caspian Sea countries. The Nabucoo and Trans-Caspian gas project are the two potential projects. For these pipelines three countries are candidates: Iran, Turkmenistan and Azerbaijan. By using the game theory framework, coalition among natural gas exporters for the Nabucco Project has been considered. Iran, Turkmenistan and Azerbaijan are three potential exporter countries. In this paper we answer the question whether three countries should enter the coalition for exporting gas to Europe or not. Moreover, we accounted bargaining power of these countries. We conclude that all countries have profits to make the coalition for gas exporting in the Nabucoo project. Iran has more bargaining power than others so Iran can play an important and active role for exporting gas to Europe in the Nabucco project.

Keywords

Natural Gag Importing
Game Theory
Shapley value
Maskin value
Nabucco Project

  • Receive Date 01 December 2015
  • First Publish Date 01 December 2015

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