Property Rights and Game-Theory Implications of Satellite Communications: The Bilateral Case of Greece and Russia

Abstract

In this paper we examine the actual legal situation concerning the attribution of geostatic positions and frequencies and the problems of frequency interference by other satellites due to not fully clear property rights. We analyze the property rights setting governing satellite communications and review the implications of the Coase theorem of these rules through a game theoretical approach between two players: Russia and Greece (Hellasat commercial communication attempt). The basic finding, in accordance with the theorem's prediction under non-zero and possibly high transaction costs, is that the end result may be sub-optimal due to the inappropriate present specification of property rights, leading either to non-use of scarce resources, or to total over-investment.