Analyzing the Nagorno-Karabakh War through Game Theory
In the second half of 2020, violent conflict broke out between Armenia and Azerbaijan within the disputed territories of Nagorno-Karabakh and caught major international attention. Armenia and Azerbaijan have had a complex history of disputes that primarily originated from ethnic tensions within bordering regions, with large numbers of ethnic Armenians residing in Azerbaijani territories during the Soviet era. While the strife between the two nations have long persisted since the fall of the USSR in 1991, the war marked the first full-fledged conflict of the two states in nearly three decades, which has since culminated into clashes that remain ongoing (including escalations as recent as September 12 along their southern border). Amidst the crisis, Game Theory was one method utilised by academic observers that analysed the conflict, which presented interesting predictions that contain significant insight towards establishing peace in the region.
The conflict, according to the paper, can be modelled through a game between Armenia and Azerbaijan. Armenia has a set of four strategies: status quo (S), negotiations (N), independence recognition (I), and attacking the enemy (A). Azerbaijan has a set of three strategies: status quo, negotiations, and attacking the enemy. The work logically deduces that maintaining the status quo is a strictly dominated strategy by both parties, and Armenia would never choose to attack Azerbaijan as its strategy, thereby reducing the game to a 2×2 system.
While the research dives into more complex optimisation functions for the probabilistic payoffs of the two states, a simplified, introductory game theory analysis of the setup can be extracted: if Azerbaijan chooses to attack, Armenia’s best response is to strive for independence recognition. Armenia wishes to negotiate, and insists to Azerbaijan that choosing to attack would lead to consequences that would decrease their payoff. The analysis concludes that there are no sustainable/pure strategy equilibria that exists within this framework. From the mathematical analysis, the paper deduces that Armenia’s strategy should be to strive towards independence recognition, which will push Azerbaijan towards choosing negotiation as well, the ultimate end goal. This emphasis would also decrease the mixed strategy probabilities for choosing attack by Azerbaijan. Their conclusion of the war being characterised as both unpreventable and interminable due to the lack of pure strategy equilibria but also must reaching a state of ephemeral negotiation following Armenia’s reinforced call towards independence recognition both held true, as a symbolic ceasefire was brokered in late November of 2020 with continuations of clashes in the present. Looking towards the future, Armenia then should persist in their proclamations and demands for independence for the Armenian-majority region in Azerbaijan.
Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3702793