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Modelling conflict over natural resources issues
Modelling conflict over natural resources issues
James W. Bryant
In recent years political instability and economic uncertainty have dominated resources policy issues. As a result, conflicts of interest have arisen in many contexts relating to the control and use of natural resources. A number of methodologies have been developed to study conflict situations in other areas, and this paper seeks to demonstrate the relevance and usefulness of these methodologies in the natural resources field. The resulting models do not always have predictive power but can provide valuable insights into the structure of conflicts. The
author
Research University 9RF, UK.
is
with
Department,
the
Operational
Mantell
Building,
of Sussex, Falmer, Brighton BNl
Recognition of the impact of human activities on global systems is a largely 20th Century phenomenon. Policy studies relating to the two aspects of this impact, resource sequestration and waste disposal, are a still more recent development. Although the current mood is calmer than in the heady days of the environmental movement ten years ago when apocalyptic forecasts were being produced in feverish succession, the realities of operating in a system which is effectively closed with respect to natural resources are if anything even more apparent. Concern has shifted, however, from fear about the damage caused to ecological systems by pollutants to apprehensions about the availability of nonrenewable resources. This concern has been heightened by the flexing of political muscle by those who control access to natural resource reserves. Issues of prime contemporary interest, therefore, centre on the control and use of natural resources. The term ‘resources policy’ implies a choice between alternatives, and if, as is probable, this choice impinges on and so is evaluated by a number of different groups of individuals each with their own value system and priorities, conflicts are likely to emerge. For instance, consumers and producers may disagree as to the way in which a particular reserve should be depleted, the former wishing to maintain extraction at a high rate to meet demand and to allow for product market expansion, while the latter may see the reserve as a finite asset on which a depletion rationing policy should be implemented so as to provide for cash flows far into the future. Common conflicts relate to the rate and method of resource extraction and utilization, or to the ownership and control of resource reserves. While the former conflicts may appear to be more technologically oriented, they are fundamentally little different from the others. Thus disagreements about the methods to be used for electricity generation can be as highly charged politically and as value-laden as disputes over the rights of access to mineral ores. This paper presents some formal methodologies which appear to be relevant to the study of such conflicts.
Methodologies A range of methodologies appears to be relevant to the study of conflicts over natural resources issues. These methodologies, which have been
0301~4207/81/010039-6$02.00 o 1981 IPC Business Press
39
developed in response to problems in other fields, can offer various levels of description or explanation if not actually providing the predictive power of more sophisticated modelling techniques. However. the insights into the structure and dynamics of conflict situations which can be provided by these approaches may be as helpful as a more elaborate hut less realistic description. Contlicts of interest arise when a number of parties concerned with an issue have differing objectives which cannot all be satisfied simultaneously. Such conflicts are resolved in practice in a variety of ways ranging from the evolution of a consensus view through discussion and negotiation to the imposition of a unilateral solution by one party on the others involved. Features amenable to analysis in such situations include the examination of alternative solutions in negotiated settlements or of the realism and effectiveness of sanctions intended to support imposed solutions. The contribution of analytical methods therefore is in the cxamination of the stability properties of systems involving conflicts. One approach to the analysis of conflicts which indicates the equilibrium properties of possible outcomes is metagame analysis.’ Briefly this analysis involves the listing of the options open to the participants in a policy-making situation and the examination of these feasible strategy combinations for their stability properties in the light of participants’ preferences between outcomes and the sanctions which they can bring to bear on other participants. Metagame analysis has been used in connection with natural resources policies in several areas including the exploitation of water resources’ and the development of nuclear energy programmes? Metagame analysis in reservoir siting
‘N. Howard, Paradoxes of Rationality. MIT Press, Cambridge, MA, 1971; K.J. Radford. Complex Decision Problems, Reston Publishing, Reston, VA, 1977 ‘N.M. Fraser and K.W. Hipel, Metagtie Analysis of the Poplar Confhct, University of Waterloo, Ontario, December 1978. ‘K.J. Radford, ‘Analysis in support of strategic policy-making’, paper presented at Second International Research Conference on Operational Research, Stratford-upon-Avon, UK, April 1976. ‘P.J. Smith (ed), The Politics of Physical Resources, Penguin, Harmondsworth, UK, 1975.
40
As an illustration of this methodology consider the affair of the Cow Green reservoir.J In 1964 ICI announced to the Tees Valley and Cleveland Water Board in North-East England that they would require an additional daily supply of about 10” m’ for new production facilities on Teeside which would be operational by 1970. In consultation with ICI the Authority eventually selected the Cow Green site in Upper Teesdale as being most suitable. However. opposition to the scheme from botanists and conservationists gradually mounted and forced the examination of other sites, the main alternative candidate being at Middleton. Strong agricultural interests opposed this site and the delay that its adoption would involve conjured up the spectre of unemployment on Teesside as well as bringing severe development problems for ICI. A grossly simplified description of the situation is given in Figure 1. Each column of figures represents a possible scenario, a ‘I’ indicating that the corrcsponding option is taken up. a ‘0’ indicating that it is not. All but 6 of the 32 (= 2”) possible scenarios are infeasible for various reasons, and of these remaining states only one is an equilibrium when participants‘ preferences and possible counter sanctions are considered. This equilibrium scenario represents the actual situation which evolved. Eventually the matter was settled by Parliament and the reservoir was sited at Cow Green. This decision depended heavily on the fact that the petitioners could bring no credible sanctions to bear on the other parties. Metagame analysis offers a way of systematically exploring a discrete set of possible outcomes in conflicts involving a number of participants each with a number of policy options available to them. There are, however. two complicating factors which arise in real-world contlicts.
RESOURCES
POLICY March 1981
Modelling Participant
Option
Scenario
ICI/Water Board
BuildatCowGreen
11111011101101000000010001001011
Build at Middleton + boreholes
11110111011010100000100010010101
Oppose Cow Green proiect
1110111011011001
0001000100100110
Oppose Middleton proiect
1101110111000111
0010001000111000
Support Cow Green proiect
1011110000111111
0100001111000000
Petitioners
Agriculturalists
Local community
eeeexxeexxe
Infeasibility
Figure 1. Metagame
analysis
of Cow
conflict over natural resources issues
Stability for participants: ICI/Water Board Petitioners Agriculturalists Local community
Overall
Green conflict.
-xxxeeeee--eex-e-xx-e
r I r
if rs sr rs
ri sr rr rr
r r r s
;
“U
uu
u
Key to notation: Scenarios: Infeasibility:
1 0 e X
Stability:
r S ; ”
5W. Page, ‘Does the UK need a materials policy?‘, Materiais and Society, Vol3, 1979, pp 109-l 13.
RESOURCES POLICY March 1981
= = =
option is taken option is not taken exclusive exhaustive choices (each participant must choose one and only one option) = illogicalchoices (choices relate logiilly to choices of other participants) = rational (no unilateral improvement for participant) = symmetric metarational (unilateral improvement but credible sanctions) zz inescapable improvement (unilateral improvement and no counter sanctions) = stable for all participants zz unstable for some participants
First, participants may have, as suggested earlier, varying perceptions of the solution. Second, possible stances adopted by participants may best be considered as continuous variables, thus giving an infinite state space for the outcomes. The first of these difficulties can be approached using hypergame analysis, the second using catastrophe theory, as is discussed below. Perceptions of a system depend crucially on the value system and perspective of the perceiving agency. Indeed perceptions may suggest problems or conflicts to one participant where to others none exist. Two outstanding examples may be given of the role of perceptual differences in natural resources conflicts. The first example takes up again the question of estimated reserves of materials which have been the subject of much pessimistic speculation. It is perhaps because, as Page’ has stated, ‘it is easier to believe in the dangers of running out than in the dangers of thinking we are running out’ (of natural resources), that the depletion view has obtained such wide currency. Yet one consequence of this perception is a dangerous vulnerability to politically induced shortages, because if constraints are placed on the movement of resources which are believed to be in very short supply, they will have a far greater effect than if depletion is not regarded as imminent. The threat of military action in response to rationing or suspension of supply by the oilproducing nations has been repeated at each successive crisis in recent years and the worldwide danger to peace arising from such action can hardly be overstated. A second example of differing perceptions is the gulf that exists in the
41
Modelling conflict over mturol resources issues
views of the pro- and anti-nuclear lobbies over the question of future energy supply. Here, it is evident from the public debate that because of the differences in perceptions. neither side is prepared to believe the evidence submitted by the opposition; in particular the assurances given by the nuclear industry on reactor safety and the evidence put forward relating to deaths from radiation by the anti-nuclear supporters arc disregarded. and so the possibility of constructive discussion is minimized. Many other examples could be cited to reinforce the view that perception plays a vital part in promoting contlicts relating to natural resources and their use. Varied perceptions also appear in relation to more specific policy issues. Chesshire” has recently reviewed the position of the various parties who can influence future UK energy supply policy. Here the views of government concerned with low-cost, secure energy supply, balance of payments position and employment prospects; of the fuel industries seeking to fulfil their statutory or financial obligations to government or shareholders through large-scale operation and short-term economic targets; and of the unions or political parties aiming to further the interests of their members, are in direct conflict in several areas. Some of these conflicts result from perceptual differences alone while others stem from opposed or irreconcilable objectives. The hypergame approach’ is a methodology which holds some promise for giving understanding of conflicts involving differences in perceptions between participants. The most recent comprehensive description of this theory given by Bennett. its originator,” discusses the substantial advantages of a model which takes account of players’ perceptions of a situation. These may best be understood if a specific example is considered. Hypergamr
“J. Chesshire. ‘Perspective on energy futures’, talk given to the Global Problems and Human Welfare Study Group of the Operational Research Society, London, March 1960. ‘P.G. Bennett, ‘Towards a theory of hypergames’, Omega, Vol5.1977, pp 749751. “P.G. Bennett, ‘Hypergames: developing a model of conflict’, Futures, Vol 12, No 6, Dee 1960 ‘For example, in the oil users’ game a move from the (AS, NC) outcome is not preferred by OU, since the alternative result of a unilateral move is (MD, NC) which OU ranks lower. Since OE would not retaliate to such a move by choosing strategy OC instead of NC (because OE ranks (MD, NC) higher than (MD, OC)). the original strategy (AS, NC) is stable both in respect of a unilateral move and in respect of possible retaliation. This type of logic can be applied to each cell of each game to establish the stable outcomes. A more rigorous discussion of stability is given in Bennett’s paper op cit. Ref 8. also references other applications of hypergame methodology.
42
analysis of‘ ‘oil crisis
During the 1950s and most of the 1960s the Middle East oil trade was dominated by the international oil companies through their control of distribution and sales. Two successive Arablsraeli wars brought the blocking of the Suez Canal and embargoes on oil exports to certain countries and demonstrated the potential power in the hands of the oil exporters. The developing situation can be considered as a hypergame involving two participants, the oil exporting countries (OEC) and the oil users (OU). If for simplicity it is assumed that the OEC have three options; to continue the existing relationship with the oil companies, to nationalize their oil interests and thereby control output, and to form a cartel of oil exporters to shape the behaviour of the whole oil market. And if it is assumed that the OU can either maintain their dependence on the supplies or else can attempt to reduce this dependency by seeking alternative sources of supply or developing new energy sources, then the picture in Figure 2 emerges. Here the preferences of each participant arc indicated numerically, higher numbers corresponding to the more preferred combinations. Each array of numbers corresponds to the game seen by one participant and for the purposes of this example it can be seen that the ‘cartel’ option is only perceived by the OEC. Stable outcomes can be found by considering unilateral moves from each position and possible retaliatory actions, and in the present case two such equilibria exist and are indicated in Figure 2.” From the OU point of view the development of alternative supplies would appear to be advisable in anticipation of the OEC nationalization policy. However the OEC perspective reveals the function of a cartel as preferable, and indeed this is the only stable
RESOURCES
POLICY March 1981
Modelling
-?$
Figure 2. Hypergame
MD
4.2
0
I
NC
FC
4
01 I
011 users’gome
analysis of ‘oil crisis’.
OC
NC
oc
conjlicr over natural resources issues
011exporters’ strotegres
011 exporters+ strotegres
exporters’ gome
Key to notation: Strategies:
Preferences:
Oil Exporters
-
0~ = NC = FC =
Continue oil company relationship Nationalize oil interests Form oil producers cartel
OilUsers
-
MD = AS =
Maintain existing oil dependency Seek alternative energy sources
Ranked with more highly preferred outcomes assigned higher marks Preferences in each cell for OU. OEC respectively Stable outcomes of individualgames ringed
outcome in their game; nationalization would not be rational from their point of view. In the hypergame, the combination of these two individuial games, there are no stable outcomes. If the OEC proceed to form a cartel, then the OU game expands to recognize this, and a stable outcome in the new hypergame thus formed exists: OU develop alternative energy sources and OEC maintain the cartel. This reflects events in the early 1970s. Hypergame analysis can often provide more surprising results than those of the example just used, especially when preference orderings or perceived strategies vary greatly between participants.“’ The method would appear to have considerable advantages over simple approaches” to similar questions which cannot reflect perceptual differences. Catastrophe
‘“An interesting illustration of this is a study of decision-making in the oil shipping business in which more complex issues of strategy are involved See M.O. Giesen and P.G. Bennett ‘Aristotle’s fallacy: a hypergame in the oil shipping business .._‘, Omega, Vol 7. No 4, 1979, pp 309 320. “J. Becker, G. Owen and R.M. Thrall, ‘A game theoretic analysis of alternate source development’, T/MS Studies in the Management Sciences, Vol 10. 1978, pp 24!3-251. “A. Woodcock and M. Davies, Catastrophe Theory, Penguin, Harmondswonh, UK, 1990; EC. Zeeman. Catastrophe Theory, Selected Papers (1972-7977), Benjamin, Reading, UK, 1977.
RESOURCES
POLICY March 1981
theory
In some conflicts the outcome can more properly be considered as being influenced by continuously varying, opposed pressures, rather than by strategic choice between a limited number of alternatives. In such cases, catastrophe theory" offers a number of descriptive models which can be used to investigate the stability properties of conflicts. The use of catastrophe theory may be illustrated by returning to the question of electricity generation by nuclear power. Essentially, catastrophes - discontinuous transitions between stable states of a system - can be illustrated as jumps from one point to another on a surface representing possible equilibrium states and defined with reference to a number of control factors. The cusp catastrophe graph is one of the simplest cases corresponding to the case of two control factors and a single measure of system behaviour, and it is this model which is used in the example. Figure 3 depicts a surface which represents possible states of the nuclear power debate. The vertical axis represents the level of public confidence in nuclear power and is the behavioural variable considered here. The control factors chosen are called ‘ecoconsciousness’, a measure of the degree of pro- or anti-nuclear feeling, and ‘nuclear hazards’, an index of the published safety record of the nuclear industry. Movements on the surface represent changes of opinion regarding nuclear power. The interesting feature of the catastrophe model is the way in which it reflects the observed properties of the nuclear debate. For example, if there is a fairly high level of ecoconsciousness and a nuclear accident
43
Modelling
conflict over natural resources issues
Nuclear
hozords
Publx confidence m nucleor power
Figure
3. Catastrophe
theory
and
Low
the
nuclear power debate.
occurs, the fall in public confidence is sudden and substantial (path a - b c) compared with similar event when the mood is pro-nuclear (path d-e f). There is an obvious advantage in the withholding of information relating to nuclear dangers demonstrated by the model, if the ecology lobby is active. Taking a second example, a growing ecoconsciousness could have vastly different effects on public confidence depending on slight variations in nuclear safety records (paths e - a and e - g). These applications of the catastrophe model certainly seem to be borne out by experience and it is probable that some of the higher-order catastrophes could also be useful in this and related cases.
Conclusions
12Bennetl, op tit, Ref 8.
44
It is only recently that formal methodologies which may be used to describe conflicts have been developed and so the descriptions given in this paper represent a fairly early state-of-the-art summary. However, the applications do illustrate the potential of these approaches in the natural resources area and it is hoped should stimulate an interest in developing them further in more substantial case studies. The criticisms may be levelled at the methods discussed that they tell little that was not already known and that they lack predictive ability. To some extent the first criticism is an empty one since such models are often used to structure information rather than to add new facts; indeed the questions they raise may be more important than those they answer. Bennett’j has suggested that the most useful role for models of conflict situations is ‘to assist systematic “assumption-busting” ’ so that a range of alternative descriptions can be continually compared. Appropriate action can then be taken when agreement on a suitable model has been achieved. The second criticism is perhaps more substantial because of the problems of obtaining an adequate database for model construction. However, inadequacies of this sort would be common to any approach at understanding the conflicts concerned.
RESOURCES POLICY March 1981
James W. Bryant
In recent years political instability and economic uncertainty have dominated resources policy issues. As a result, conflicts of interest have arisen in many contexts relating to the control and use of natural resources. A number of methodologies have been developed to study conflict situations in other areas, and this paper seeks to demonstrate the relevance and usefulness of these methodologies in the natural resources field. The resulting models do not always have predictive power but can provide valuable insights into the structure of conflicts. The
author
Research University 9RF, UK.
is
with
Department,
the
Operational
Mantell
Building,
of Sussex, Falmer, Brighton BNl
Recognition of the impact of human activities on global systems is a largely 20th Century phenomenon. Policy studies relating to the two aspects of this impact, resource sequestration and waste disposal, are a still more recent development. Although the current mood is calmer than in the heady days of the environmental movement ten years ago when apocalyptic forecasts were being produced in feverish succession, the realities of operating in a system which is effectively closed with respect to natural resources are if anything even more apparent. Concern has shifted, however, from fear about the damage caused to ecological systems by pollutants to apprehensions about the availability of nonrenewable resources. This concern has been heightened by the flexing of political muscle by those who control access to natural resource reserves. Issues of prime contemporary interest, therefore, centre on the control and use of natural resources. The term ‘resources policy’ implies a choice between alternatives, and if, as is probable, this choice impinges on and so is evaluated by a number of different groups of individuals each with their own value system and priorities, conflicts are likely to emerge. For instance, consumers and producers may disagree as to the way in which a particular reserve should be depleted, the former wishing to maintain extraction at a high rate to meet demand and to allow for product market expansion, while the latter may see the reserve as a finite asset on which a depletion rationing policy should be implemented so as to provide for cash flows far into the future. Common conflicts relate to the rate and method of resource extraction and utilization, or to the ownership and control of resource reserves. While the former conflicts may appear to be more technologically oriented, they are fundamentally little different from the others. Thus disagreements about the methods to be used for electricity generation can be as highly charged politically and as value-laden as disputes over the rights of access to mineral ores. This paper presents some formal methodologies which appear to be relevant to the study of such conflicts.
Methodologies A range of methodologies appears to be relevant to the study of conflicts over natural resources issues. These methodologies, which have been
0301~4207/81/010039-6$02.00 o 1981 IPC Business Press
39
developed in response to problems in other fields, can offer various levels of description or explanation if not actually providing the predictive power of more sophisticated modelling techniques. However. the insights into the structure and dynamics of conflict situations which can be provided by these approaches may be as helpful as a more elaborate hut less realistic description. Contlicts of interest arise when a number of parties concerned with an issue have differing objectives which cannot all be satisfied simultaneously. Such conflicts are resolved in practice in a variety of ways ranging from the evolution of a consensus view through discussion and negotiation to the imposition of a unilateral solution by one party on the others involved. Features amenable to analysis in such situations include the examination of alternative solutions in negotiated settlements or of the realism and effectiveness of sanctions intended to support imposed solutions. The contribution of analytical methods therefore is in the cxamination of the stability properties of systems involving conflicts. One approach to the analysis of conflicts which indicates the equilibrium properties of possible outcomes is metagame analysis.’ Briefly this analysis involves the listing of the options open to the participants in a policy-making situation and the examination of these feasible strategy combinations for their stability properties in the light of participants’ preferences between outcomes and the sanctions which they can bring to bear on other participants. Metagame analysis has been used in connection with natural resources policies in several areas including the exploitation of water resources’ and the development of nuclear energy programmes? Metagame analysis in reservoir siting
‘N. Howard, Paradoxes of Rationality. MIT Press, Cambridge, MA, 1971; K.J. Radford. Complex Decision Problems, Reston Publishing, Reston, VA, 1977 ‘N.M. Fraser and K.W. Hipel, Metagtie Analysis of the Poplar Confhct, University of Waterloo, Ontario, December 1978. ‘K.J. Radford, ‘Analysis in support of strategic policy-making’, paper presented at Second International Research Conference on Operational Research, Stratford-upon-Avon, UK, April 1976. ‘P.J. Smith (ed), The Politics of Physical Resources, Penguin, Harmondsworth, UK, 1975.
40
As an illustration of this methodology consider the affair of the Cow Green reservoir.J In 1964 ICI announced to the Tees Valley and Cleveland Water Board in North-East England that they would require an additional daily supply of about 10” m’ for new production facilities on Teeside which would be operational by 1970. In consultation with ICI the Authority eventually selected the Cow Green site in Upper Teesdale as being most suitable. However. opposition to the scheme from botanists and conservationists gradually mounted and forced the examination of other sites, the main alternative candidate being at Middleton. Strong agricultural interests opposed this site and the delay that its adoption would involve conjured up the spectre of unemployment on Teesside as well as bringing severe development problems for ICI. A grossly simplified description of the situation is given in Figure 1. Each column of figures represents a possible scenario, a ‘I’ indicating that the corrcsponding option is taken up. a ‘0’ indicating that it is not. All but 6 of the 32 (= 2”) possible scenarios are infeasible for various reasons, and of these remaining states only one is an equilibrium when participants‘ preferences and possible counter sanctions are considered. This equilibrium scenario represents the actual situation which evolved. Eventually the matter was settled by Parliament and the reservoir was sited at Cow Green. This decision depended heavily on the fact that the petitioners could bring no credible sanctions to bear on the other parties. Metagame analysis offers a way of systematically exploring a discrete set of possible outcomes in conflicts involving a number of participants each with a number of policy options available to them. There are, however. two complicating factors which arise in real-world contlicts.
RESOURCES
POLICY March 1981
Modelling Participant
Option
Scenario
ICI/Water Board
BuildatCowGreen
11111011101101000000010001001011
Build at Middleton + boreholes
11110111011010100000100010010101
Oppose Cow Green proiect
1110111011011001
0001000100100110
Oppose Middleton proiect
1101110111000111
0010001000111000
Support Cow Green proiect
1011110000111111
0100001111000000
Petitioners
Agriculturalists
Local community
eeeexxeexxe
Infeasibility
Figure 1. Metagame
analysis
of Cow
conflict over natural resources issues
Stability for participants: ICI/Water Board Petitioners Agriculturalists Local community
Overall
Green conflict.
-xxxeeeee--eex-e-xx-e
r I r
if rs sr rs
ri sr rr rr
r r r s
;
“U
uu
u
Key to notation: Scenarios: Infeasibility:
1 0 e X
Stability:
r S ; ”
5W. Page, ‘Does the UK need a materials policy?‘, Materiais and Society, Vol3, 1979, pp 109-l 13.
RESOURCES POLICY March 1981
= = =
option is taken option is not taken exclusive exhaustive choices (each participant must choose one and only one option) = illogicalchoices (choices relate logiilly to choices of other participants) = rational (no unilateral improvement for participant) = symmetric metarational (unilateral improvement but credible sanctions) zz inescapable improvement (unilateral improvement and no counter sanctions) = stable for all participants zz unstable for some participants
First, participants may have, as suggested earlier, varying perceptions of the solution. Second, possible stances adopted by participants may best be considered as continuous variables, thus giving an infinite state space for the outcomes. The first of these difficulties can be approached using hypergame analysis, the second using catastrophe theory, as is discussed below. Perceptions of a system depend crucially on the value system and perspective of the perceiving agency. Indeed perceptions may suggest problems or conflicts to one participant where to others none exist. Two outstanding examples may be given of the role of perceptual differences in natural resources conflicts. The first example takes up again the question of estimated reserves of materials which have been the subject of much pessimistic speculation. It is perhaps because, as Page’ has stated, ‘it is easier to believe in the dangers of running out than in the dangers of thinking we are running out’ (of natural resources), that the depletion view has obtained such wide currency. Yet one consequence of this perception is a dangerous vulnerability to politically induced shortages, because if constraints are placed on the movement of resources which are believed to be in very short supply, they will have a far greater effect than if depletion is not regarded as imminent. The threat of military action in response to rationing or suspension of supply by the oilproducing nations has been repeated at each successive crisis in recent years and the worldwide danger to peace arising from such action can hardly be overstated. A second example of differing perceptions is the gulf that exists in the
41
Modelling conflict over mturol resources issues
views of the pro- and anti-nuclear lobbies over the question of future energy supply. Here, it is evident from the public debate that because of the differences in perceptions. neither side is prepared to believe the evidence submitted by the opposition; in particular the assurances given by the nuclear industry on reactor safety and the evidence put forward relating to deaths from radiation by the anti-nuclear supporters arc disregarded. and so the possibility of constructive discussion is minimized. Many other examples could be cited to reinforce the view that perception plays a vital part in promoting contlicts relating to natural resources and their use. Varied perceptions also appear in relation to more specific policy issues. Chesshire” has recently reviewed the position of the various parties who can influence future UK energy supply policy. Here the views of government concerned with low-cost, secure energy supply, balance of payments position and employment prospects; of the fuel industries seeking to fulfil their statutory or financial obligations to government or shareholders through large-scale operation and short-term economic targets; and of the unions or political parties aiming to further the interests of their members, are in direct conflict in several areas. Some of these conflicts result from perceptual differences alone while others stem from opposed or irreconcilable objectives. The hypergame approach’ is a methodology which holds some promise for giving understanding of conflicts involving differences in perceptions between participants. The most recent comprehensive description of this theory given by Bennett. its originator,” discusses the substantial advantages of a model which takes account of players’ perceptions of a situation. These may best be understood if a specific example is considered. Hypergamr
“J. Chesshire. ‘Perspective on energy futures’, talk given to the Global Problems and Human Welfare Study Group of the Operational Research Society, London, March 1960. ‘P.G. Bennett, ‘Towards a theory of hypergames’, Omega, Vol5.1977, pp 749751. “P.G. Bennett, ‘Hypergames: developing a model of conflict’, Futures, Vol 12, No 6, Dee 1960 ‘For example, in the oil users’ game a move from the (AS, NC) outcome is not preferred by OU, since the alternative result of a unilateral move is (MD, NC) which OU ranks lower. Since OE would not retaliate to such a move by choosing strategy OC instead of NC (because OE ranks (MD, NC) higher than (MD, OC)). the original strategy (AS, NC) is stable both in respect of a unilateral move and in respect of possible retaliation. This type of logic can be applied to each cell of each game to establish the stable outcomes. A more rigorous discussion of stability is given in Bennett’s paper op cit. Ref 8. also references other applications of hypergame methodology.
42
analysis of‘ ‘oil crisis
During the 1950s and most of the 1960s the Middle East oil trade was dominated by the international oil companies through their control of distribution and sales. Two successive Arablsraeli wars brought the blocking of the Suez Canal and embargoes on oil exports to certain countries and demonstrated the potential power in the hands of the oil exporters. The developing situation can be considered as a hypergame involving two participants, the oil exporting countries (OEC) and the oil users (OU). If for simplicity it is assumed that the OEC have three options; to continue the existing relationship with the oil companies, to nationalize their oil interests and thereby control output, and to form a cartel of oil exporters to shape the behaviour of the whole oil market. And if it is assumed that the OU can either maintain their dependence on the supplies or else can attempt to reduce this dependency by seeking alternative sources of supply or developing new energy sources, then the picture in Figure 2 emerges. Here the preferences of each participant arc indicated numerically, higher numbers corresponding to the more preferred combinations. Each array of numbers corresponds to the game seen by one participant and for the purposes of this example it can be seen that the ‘cartel’ option is only perceived by the OEC. Stable outcomes can be found by considering unilateral moves from each position and possible retaliatory actions, and in the present case two such equilibria exist and are indicated in Figure 2.” From the OU point of view the development of alternative supplies would appear to be advisable in anticipation of the OEC nationalization policy. However the OEC perspective reveals the function of a cartel as preferable, and indeed this is the only stable
RESOURCES
POLICY March 1981
Modelling
-?$
Figure 2. Hypergame
MD
4.2
0
I
NC
FC
4
01 I
011 users’gome
analysis of ‘oil crisis’.
OC
NC
oc
conjlicr over natural resources issues
011exporters’ strotegres
011 exporters+ strotegres
exporters’ gome
Key to notation: Strategies:
Preferences:
Oil Exporters
-
0~ = NC = FC =
Continue oil company relationship Nationalize oil interests Form oil producers cartel
OilUsers
-
MD = AS =
Maintain existing oil dependency Seek alternative energy sources
Ranked with more highly preferred outcomes assigned higher marks Preferences in each cell for OU. OEC respectively Stable outcomes of individualgames ringed
outcome in their game; nationalization would not be rational from their point of view. In the hypergame, the combination of these two individuial games, there are no stable outcomes. If the OEC proceed to form a cartel, then the OU game expands to recognize this, and a stable outcome in the new hypergame thus formed exists: OU develop alternative energy sources and OEC maintain the cartel. This reflects events in the early 1970s. Hypergame analysis can often provide more surprising results than those of the example just used, especially when preference orderings or perceived strategies vary greatly between participants.“’ The method would appear to have considerable advantages over simple approaches” to similar questions which cannot reflect perceptual differences. Catastrophe
‘“An interesting illustration of this is a study of decision-making in the oil shipping business in which more complex issues of strategy are involved See M.O. Giesen and P.G. Bennett ‘Aristotle’s fallacy: a hypergame in the oil shipping business .._‘, Omega, Vol 7. No 4, 1979, pp 309 320. “J. Becker, G. Owen and R.M. Thrall, ‘A game theoretic analysis of alternate source development’, T/MS Studies in the Management Sciences, Vol 10. 1978, pp 24!3-251. “A. Woodcock and M. Davies, Catastrophe Theory, Penguin, Harmondswonh, UK, 1990; EC. Zeeman. Catastrophe Theory, Selected Papers (1972-7977), Benjamin, Reading, UK, 1977.
RESOURCES
POLICY March 1981
theory
In some conflicts the outcome can more properly be considered as being influenced by continuously varying, opposed pressures, rather than by strategic choice between a limited number of alternatives. In such cases, catastrophe theory" offers a number of descriptive models which can be used to investigate the stability properties of conflicts. The use of catastrophe theory may be illustrated by returning to the question of electricity generation by nuclear power. Essentially, catastrophes - discontinuous transitions between stable states of a system - can be illustrated as jumps from one point to another on a surface representing possible equilibrium states and defined with reference to a number of control factors. The cusp catastrophe graph is one of the simplest cases corresponding to the case of two control factors and a single measure of system behaviour, and it is this model which is used in the example. Figure 3 depicts a surface which represents possible states of the nuclear power debate. The vertical axis represents the level of public confidence in nuclear power and is the behavioural variable considered here. The control factors chosen are called ‘ecoconsciousness’, a measure of the degree of pro- or anti-nuclear feeling, and ‘nuclear hazards’, an index of the published safety record of the nuclear industry. Movements on the surface represent changes of opinion regarding nuclear power. The interesting feature of the catastrophe model is the way in which it reflects the observed properties of the nuclear debate. For example, if there is a fairly high level of ecoconsciousness and a nuclear accident
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Modelling
conflict over natural resources issues
Nuclear
hozords
Publx confidence m nucleor power
Figure
3. Catastrophe
theory
and
Low
the
nuclear power debate.
occurs, the fall in public confidence is sudden and substantial (path a - b c) compared with similar event when the mood is pro-nuclear (path d-e f). There is an obvious advantage in the withholding of information relating to nuclear dangers demonstrated by the model, if the ecology lobby is active. Taking a second example, a growing ecoconsciousness could have vastly different effects on public confidence depending on slight variations in nuclear safety records (paths e - a and e - g). These applications of the catastrophe model certainly seem to be borne out by experience and it is probable that some of the higher-order catastrophes could also be useful in this and related cases.
Conclusions
12Bennetl, op tit, Ref 8.
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It is only recently that formal methodologies which may be used to describe conflicts have been developed and so the descriptions given in this paper represent a fairly early state-of-the-art summary. However, the applications do illustrate the potential of these approaches in the natural resources area and it is hoped should stimulate an interest in developing them further in more substantial case studies. The criticisms may be levelled at the methods discussed that they tell little that was not already known and that they lack predictive ability. To some extent the first criticism is an empty one since such models are often used to structure information rather than to add new facts; indeed the questions they raise may be more important than those they answer. Bennett’j has suggested that the most useful role for models of conflict situations is ‘to assist systematic “assumption-busting” ’ so that a range of alternative descriptions can be continually compared. Appropriate action can then be taken when agreement on a suitable model has been achieved. The second criticism is perhaps more substantial because of the problems of obtaining an adequate database for model construction. However, inadequacies of this sort would be common to any approach at understanding the conflicts concerned.
RESOURCES POLICY March 1981