Anna’s Out of Town News

The Russia-Ukraine natural gas conflict reminds me of a classic Thomas Schelling situation: the dynamite truck dilemma. There are two dynamite trucks moving towards each other on a narrow road. If they keep moving and clash, the drivers will blow themselves up. So they have to stop and to make a decision who will yield to whom. That way, they won’t be late with their deliveries — and they will both make out of this situation alive. But both drivers have a previous history of conflicts with each other. Let’s say they belong to two different ethnic groups who hate each other, so neither is going to accommodate the other one’s needs. Additionally, the driver who yields will ‘lose face’ and be disgraced forever with his/her people, and, say, lose a bonus from their company.

Schelling proposes a solution: to get a third arty to come in and act as an arbiter. A ‘bystander’ is interested in helping the drivers solve the situation — mostly to save her own life from a dynamite explosion (let’s say this bystander can’t run or walk away). The drivers are somewhat rational; they don’t want to los their lives, so they want some solution. It’s just that they can’t reach one themselves.

Russia and Ukraine are the ‘truck drivers.’ Europe is the bystander aka the ‘third party.’ Of course, Europe is not going to die in a gas explosion, but not getting enough natural gas is pretty bad for it.

As both a Russian and a Ukrainian, I have no desire to judge which country is right or wrong. I have been watching the situation, and it has been pretty predictable so far. I expected President Sarkozy to be negotiating the situation, but he seems to have found himself a more exciting conflict to work on. Well, whoever acts as that ‘bystander,’ I hope that Schelling was right about a dynamite truck situation being totally solvable.

NB: Check out Steve LeVine’s wonderful explanation of the problem.