Chapter 5 - Cross-Border Resource Management: Methods

Abstract

This chapter introduces various methods on the fair divisions of territories (or any other territorial-related resources) among claimants, which include the divider–chooser method, the lone divider method, the lone chooser method, the last diminisher method, the method of sealed bids and the method of markers. In the meantime, cooperative and non-cooperative games are also developed so as to evaluate or optimize various cross-border behaviours. Usually, cooperative games are also win–win games, whereas non-cooperative games are not. However, the cooperative games sometimes may evolve into non-cooperative games; and the non-cooperative games may lead to lose–lose outcomes for all players concerned. At the end of this chapter, a three-player, non-cooperative game is constructed for policymakers to handle the South China Sea disputes, from which the conditions for a mutual deterrence (subgame perfect) equilibrium are derived.