Modeling and Analysis of the Russia and Europe Competition on Energy, Based on the Game Theory

Document Type : Original Article


1 M.A of System Management and Efficiency, Tarbiat Modares University, Tehran, Iran

2 Assistant Professor of Industrial Engineering, Tarbiat Modares University, Tehran, Iran


Energy is one of the most important issues of the 21th century, and natural gas is of considerable significance, because of its characteristics, especially those involved in its transmission methods. Thus, concepts such as energy security, energy producers and consumers, gas lines and their security have gained a high attraction in the geopolitical discourse on energy.
Generally, the game theory is an appropriate tool for modeling and analysis of strategic situations in which a player’s decision depends on other players’ strategies. The Graph Model for Conflict Resolution (GMCR) is an extension on non-cooperative games with non-quantitative approach. GMCR has several advantages that make it an effective tool for modeling and analysis of complex real world conflicts. General steps in formal methodology of GMCR include modeling and analysis. The analysis is based on equilibrium which is a critical concept in the game theory. Equilibrium is a state in which there is no incentive for players to move away from that state. Equilibrium might be found based on different solution concepts.The Graph Model for Conflict Resolution has been utilized in this research to investigate the gas conflict between Russia and the European Union and to predict its outcomes. Besides of Russia and the European Union, transit countries have been considered as the third player since gas pipe lines are located in these countries. The research method carried out in this research is descriptive and analytical.  
Results Conclusion
Among 112 feasible states of the conflict studied in this research, two states are predicted as the most likely outcomes. The analysis of the model shows that LNG has a significant role to play in the energy security of Europe, and in case of increased demands for natural gas in European Union, the construction of Trans-Sahara pipeline gas line is not farfetched. Moreover, the continuation of provision of gas in transit lines is very important for Russia and the construction of the South stream pipeline deems necessary to solve this problem. Results of the model imply that Iran must invest for LNG production in near future.