Transit Infrastructure in Eastern South Asia: A Game Theoretic Analysis of the BBIN Motor Vehicles Agreement

BBIN_Game Theory_PDF

 Rahul Singh Chauhan, 2nd Year, B.Sc. Economics (Hons.) Presidency University, Kolkata, tries to analyze BBIN Motor Vehicles Agreement with the help of Game Theory.

ABSTRACT

Investment in transit infrastructure and connectivity remains one of the biggest challenges to South Asian integration. Bangladesh, Bhutan, India & Nepal (BBIN) recently signed the Motor Vehicles Agreement 2015, marking a significant shift in the region’s policy paradigm. However cross-border trade facilitation and connectivity remain big challenges to the efficient implementation of the agreement, due to the inadequacy of infrastructure and lack of reforms in the archaic customs regime of member nations. To develop an argument for fostering cross-border investments this paper develops a model negotiation over the infrastructural cost burden sharing as a Rubinstein’s bargaining game. Then we develop a non-cooperative game theoretic setup to achieve a model of agreement over the ratification, reform, burden and investment through an interconnected games approach. Conclusively punishment strategies are mulled for compliance to the treaty and its time-bound implementation.

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