Caspian Basin Natural Gas Transfer: A Cooperative Game Theory Approach

Document Type : Original Article


Allameh Tabatabai University, Tehran, Iran


This research uses a game theory approach to study the probable scenarios of gas transmission from the Caspian basin to Europe. Due to the growing importance of climate change, the use of natural gas, as the cleanest fossil energy, has been expanded. We first analyse the position of the Caspian basin resources on the world energy market and the current projects. We then develop the most probable scenarios for the next 30 years. We estimate each player's bargaining power using the Shapely value in the most probable scenarios and analyse the outcomes in the context of the international political economy. The results indicate that geopolitics plays a key role in countries’ bargaining power on regional energy markets, followed by their production capacity. The results also show that the southern export route is more economical than the Trans-Caspian pipeline.


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