TY  - JOUR
TI  - Investment Options and Bargaining Power in the Eurasian Supply Chain for Natural Gas
T2  - HSE Economic Journal 
IS  - HSE Economic Journal 
KW  - game theory
KW  - gas supply
KW  - transit countries
AB  - We use cooperative game theory to analyze how the architecture of the pipeline network determines the power structure in the supply chain for Russian gas. If the assessment is narrowly focussed on the abilities to obstruct flows in the existing system, the main transit countries Belarus and Ukraine appear to be strong. If investment options are accounted for, however, Russia achieves clear dominance. We show that options to bypass one of the transit countries are of little strategic importance compared to Russia's direct access to its customers through the Baltic Sea. Comparing the results of our calibrated model with empirical evidence obtained from transit and import agreements we find that the Shapley value explains the power of major transit countries surprisingly well and outperforms the nucleolus.
AU  - F. Khubert
AU  - S. Ikonnikova
UR  - https://ej.hse.ru/en/2008-12-3/26561689.html
PY  - 2008
SP  - 311-336
VL  - 12