Assignment for S4 09.03.

02015
How will the conflict between Russia and Ukraine impact the
European gas market? A game theoretical approach.
by
Diana Mihaela Stnculescu1, MSc Student

The consumption of natural gas in Europe is very large and projections suggest
that it is still increasing. Nevertheless, considering the decreasing trend in
domestic production makes Europe heavily dependent on import.
Large consumption of natural gas, accompanied by decreasing domestic
production makes Europe heavily dependent on imports.
Due to its specific form, much of the natural gas trade occurs through natural gas
pipelines. Russia, through its state-owned company, Gazprom, assures one third
of Most of Europes need of gas, out of which more than half is delivered through
the Nord Stream pipeline that transits Ukraine.
Given the current situation between Russia and Ukraine, this specific supply
route is considered a dangerously unstable one.

Cutting the gas stream to

Ukraine might face Europe with serious problems regarding gas supply.
(background) Therefore, in this paper we will try to analyze the impact of this
potential cut off and how does will the rest of Europe cope with that.
The novelty of the paper will lay in the fact that wWe will address the gas supply
and demand as if the transit through Ukraine has been stopped and new
solutions have to be found. (Purpose)
Currently,a Asimilar player to Russia is Norway, so will we look at try to see how
this will affects its production capacity, the prices and what new routes shouldwill
have to be constructed. Are these alternatives feasible or will they end up dying,
as was the case with the Nabucco pipeline project? In order to find pertinent
information I will we perform a data analysis and see how the current situation
looks like: main players, relevant groupings of the countries. Afterwards, using
1Email: stanculescu_diana@yahoo.com

cooperative game theory weI will try to establish the bargaining power of the
major players by computing the Shapley Value. Moreover, given the network
structure of the gas pipelines we I will apply a Network Game Model, where
pipelines networks are modeled as graphs. (model approach)
Furthermore, I will review other alternatives that Europe has at hand, such as
North African gas, Central Asian gas or the import of liquefied natural gas (LNG).

Keywords: Gas Market, Game Theory, Shapely Value

Applied paper, 203 words, 1580 characters

Corruption seems to be everywhere, holding back developing countries and

keeping the poorest people in poverty. What determines the level of corruption?
The question may be a good starting point in studying this phenomena since
corruption levels vary greatly across countries. For answering to this question
and to better understand the relationship between economic factors such as
economic development and growth, inflation, economic freedom and income
distribution and the perceived level of corruption, an empirical study is pursued
by using a cross - section data on 30 European countries between 2010-2014.
Consistent with our predictions, we find that economic development, inflation,
economic freedom and income distribution are significantly related to the level of
perceived corruption in a country. These findings suggest that when GDP per
capita rises, there are registered lower levels of perceived corruption. On the
contrary, in periods of high inflation and skew income distribution, corruption
rises. Last but not the least, this study offers an overview of the most relevant
drivers of corruption which can be used to build appropriate anti-corruption
strategies.

The use of sophisticated quantitative modeling techniqu es and procedures to

clean and make sense of these data is however limited .
In this section we introduce a game theoretic centrality mea- sure to determine
the key player in a terrorist network. Coopera- tive game theory studies
situations in which players can generate benefits by working together
The idea behind degree centrality (Proctor and Loomis, 1951 ) is that the more
people one knows the more important one is.
The identification of key players in a terrorist organization aids in preventing
attacks, the efficient allo- cation of surveillance measures, and the destabilization
of the corresponding network. In this paper, we introduce a game theoretic
approach to identify key players in terrorist networks. In particular we use the
Shaple y value as a measure of impo rtance in cooperative games that are
specifically designed to reflect the context of the terrorist organization at hand.
The advantage of this approach is that both the structure of the terrorist
network, which usually reflects a communication and interaction structure, as
well as non-netwo rk features, i.e., individual based parameters such as financial
means or bomb building skills, can be taken into account. The application of our
methodology to the analysis results in rankings of the terrorists in the netwo rk.
We illustrate our methodology through two case studies: Jemaah Islamiyahs Bali
bombing and Al Qaedas 9/11 attack, which lead to new insights in the operation
al networks respon- sible for these attacks.

Could terrorism be predicted? A game theoretical approach.

Terrorism has always been a serious problem, but lately the frequency and
magnitude of terrorist attacks has alarmingly increased. This is why identifying
key players in terrorist organizations has the potential to lead to efficient
allocation of resources in order to destabilize said networks or even prevent
terrorist attacks. In this paper I apply a game theoretical approach, based on a
Social Network Analysis. I establish the importance of players in the designed
network using cooperative game, by computing a form of the Shapley Value. The
model allows for both the structure of the network as well as non-network
related features to be taken into consideration. The model is applied to the July
7th London bombings and results suggest that Haroon Rashid Aswat was the
mastermind behind the attack, which is consistent with the decision that was
ruled out in the case. The application of the described methodology consists on
the possibility to assign rankings of the terrorists inside the network they belong
to, thus leading to more efficient counter-terrorist measures. Nevertheless, the
difficulty lies in the fact that information prior to an attack taking place is not
easy to obtain or even when available, it is probable not to read it correctly.

Keywords: Game Theory, Social Network Analysis, Terrorism

Haroon Rashid Aswat

I.M. Said
R. Mohamed
I. Hamdi
W. Mohammed
Muhammad
Osama bin Laden
J. Ujaama
M.S. Khan
M.J. Babar
H. Patel
S. Tanweer
Tika Khan
A.H. Masri