Introduction

Present-day economies fundamentally require natural resources to meet consumer demands, generate income and facilitate trade. It is thus unsurprising that countless conflicts have been fought over them. Repeatedly disputing the formal jurisdiction over the land under which such riches lie, is common among international players. The eastern Mediterranean sea is one such area, where in anticipation of unearthing large hydrocarbon reserves, the 2020 Turkish government has made aggressive moves with several drilling ships, claiming to be compliant under international law, but breaching what had been considered the Exclusive Economic Zone of Northern Cyprus under EU Law (BBC).

This paper will explore Turkeys decision to move into the region by means of a game-theoretic thought experiment. This will consist of a comparison between a Stackelberg Duopoly model (with added sanction risk), and the alternative of a Cournot duopoly simultaneous-move game (with ‘drilling-permit’ costs).

I will begin by outlining the necessary conditions of the game-theoretic analysis. Next, the Cournot model, its characteristics and its resulting equilibrium implications will be formalized and interpreted. Subsequently, the Stackelberg Duopoly model will be introduced, analyzed and evaluated. Finally, results will be presented, and model strengths and weaknesses assessed.