Dynamic Bargaining and the Prospects for Learning in the Petroleum Industry: The Case of Kazakhstan

1his article examines the bargaining interface between petroleum-rich developing countries and large multinational corporations, with an application to the case of Kazakhstan, formerly a Soviet Republic. In the analytic narrative tradition, this ankle combines a case study with an extensive form game, applying Theodore Moran's dynamic bargaining theory, which posits that, over time and through repeated interaction, devdoping countries do better for themsdves, incre­ mentally improving their outcomes through bargaining and strategic interaction, thereby advancing along a learning curve. The application of this theory is systematiz.ed through the utilization ofgame theory; an extensive game modded on strategic, iterated bargaining behavior between the two actors is introduced. 1his dynamic game allows for the recalculation ofstrate­ gies based on the players' revealed moves, allowing for the concept of learning while doing. The game is then applied to Kazakhstan's particular situation. The application of Moran's theory through the use ofa generalizable game provides a method for resource-rich developing coun­ trier-panicularly those in the nascent stages ofdeveloping these industrier-to systematize the negotiation process and accelerate their ascent on a bargaining learning curve.