This paper provides a quantitative analysis of power relations and strategic investment in the transport system for Russian gas. First, we analyse how the architecture of the transport system determines Russia’s bargaining power vis-à-vis (potential) transit countries. By applying the Shapley...

This note analyses investment and risk-taking in a simple agency model of public regulation/procurement borrowed from Laffont & Tirole (1993). We show that the principal will overinvest or underinvest depending on whether investment is marginally more productive in bad or in good states. Due to...