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⁴ James, Patrick and Michelin, Robert, “The Canadian National Energy Program and Its Aftermath: Perspectives on an Era of Confrontation,” American Review of Canadian Studies 19 (1989), 59–81.CrossRefGoogle Scholar

⁵ Excellent introductions to game theory may be obtained from Davis, Morton D., Game Theory: A Nontechnical Introduction (rev. ed.; New York: Basic Books, 1983)Google Scholar; Friedman, James W., Game Theory with Applications to Economics (New York: Oxford University Press, 1986)Google Scholar; Shubik, Martin, Game Theory in the Social Sciences: Concepts and Solutions (Cambridge: MIT Press, 1982)Google Scholar; and Zagare, Frank C., Game Theory (Beverly Hills: Sage Publications, 1984).CrossRefGoogle Scholar

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⁷ Doern, and Toner, , The Politics of Energy, 7.Google Scholar

⁸ The following description of the Alberta proposals is based on Scarfe, Brian L., “The Federal Budget and Energy Program, October 28th, 1980: A Review,” Canadian Public Policy 7 (1981), 11.CrossRefGoogle Scholar

⁹ James, , “The Canadian National Energy Program,” 182.Google Scholar

¹⁰ Doern, and Toner, , The Politics of Energy, 45.Google Scholar

¹¹ Ibid., 44. Usianer's study of voting in that election supports the position that energy policy affected the outcome significantly: the energy issue seemed to mobilize strong supporters of each party “above and beyond the effects of party I.D. and party leader evaluations.” See Uslaner, Eric M., “Looking Forward and Looking Backward: Prospective and Retrospective Voting in the 1980 Federal Election in Canada,” British Journal of Political Science 19 (1989), 495–513.CrossRefGoogle Scholar

¹² When provincial leaders have adopted platforms that emphasize conciliation, potential benefits for the province, as opposed to the national interest, are stressed when communicating with voters.

¹³ The Albertans knew that the Trudeau government intended to tie the NEP to patriation of the constitution; in fact, when signing the 1981 Agreement (to be described at a later point), Lougheed emphasized his continuing opposition to Ottawa's patriation plan (The Globe and Mail, September 3, 1981, 11Google Scholar). The Albertans hoped that retaliation would delay implementation of the NEP long enough that, in order to succeed with the constitutional initiative, the federal Liberals would have to drop the energy issue.

¹⁴ Doern, and Toner, , The Politics of Energy, 44.Google Scholar

¹⁵ The full statement of the Program appears in Energy, Mines and Resources Canada, The National Energy Program (Ottawa, 1980).Google Scholar

¹⁶ Grant, John, “Foreign Investment: Turning Off and Turning On,” Canadian Public Policy 9 (1983), 33.CrossRefGoogle Scholar

¹⁷ The Globe and Mail, November 3, 1980, 1Google Scholar; and November 1, 1980, 14. Scarfe (“The Federal Budget and Energy Program,” 11) summed up the general reaction within Alberta to the federal initiatives: “Perhaps it is understandable why so many Western Canadians, and not just those resident in Alberta, are angered and bewildered by the Lalonde energy policy and the MacEachen budget, and why the oil and gas producing industry is considering drastic retrenchment of its activities. For the energy program contained in the budget is an affront to our economic intelligence, and an attack on our regional interests.”

¹⁸ The Globe and Mail, November 1, 1980, 14.Google Scholar

¹⁹ Maclean's, March 2, 1981.Google Scholar

²⁰ The Globe and Mail, March 3, 1981, 1.Google Scholar

²¹ The following description of the Agreement is taken from The Globe and Mail, September 2, 1981, 1.Google Scholar

²² The Agreement also restricted taxation changes during the life of the Agreement. One study described the IORT as follows: “[It] is to be levied at 50 per cent of the incremental revenues on old oil. These revenues are equal to production of old oil times the difference between the old oil price and the price established in the NEP, after subtracting the provincial royalties from both prices.” See Helliwell, John F. and McRae, Robert N., “Resolving the Energy Conflict: From the National Energy Program to the Energy Agreement,” Canadian Public Policy 8 (1982), 16.CrossRefGoogle Scholar

²³ James, and Michelin, , “The Canadian National Energy Program and Its Aftermath”Google Scholar; Nordlinger, Eric A., On the Autonomy of the Democratic State (Cambridge: Harvard University Press, 1981), 1.Google Scholar

²⁴ James, and Michelin, , “The Canadian National Energy Program and Its Aftermath,” 69Google Scholar, described that type of behaviour as a reflection of Type II state autonomy (Nordlinger, , On the Autonomy of the Democratic StateGoogle Scholar). When state and societal preferences diverge initially, public officials “attempt to change societal preferences and, once successful, to translate the now-similar preferences into public policy.”

²⁵ Uslaner, (Shale Barrel Politics, 178Google Scholar) also concluded in favour of a two-person game, implicitly noting the role of other actors such as interest groups: “we can readily model events as a two-person (two-party) game. Cleavages reinforce each other so that the bargaining model is easier to depict.”

²⁶ Milne, David, Tug of War: Ottawa and the Provinces under Trudeau and Mulroney (Toronto: James Lorimer, 1986).Google Scholar

²⁷ Dome Petroleum should be noted as an exception within A's implicit coalition. It took advantage of federal initiatives and supported the general aims of the NEP. However, neither Dome nor other companies functioned as independent players in the EG, so the two-actor assumption is not threatened by the existence of this anomaly.

²⁸ Friedman, , Game Theory, 148.Google Scholar

²⁹ In James, , “The Canadian National Energy Program and Its Aftermath,” 177Google Scholar, which focussed strictly on outcomes, intergovernmental bargaining is described as leaning toward “the co-operative end of the game spectrum” and suitable for consideration “in the context of co-operative game theory.” The EG, however, remains non-co-operative in the literal sense, because the players can reject the details of an agreement derived at any intermediate stage. The arguments about costs of breaking an agreement become relevant only when a formal, public deal exists.

³⁰ Simeon, Richard, “Natural Resource Revenues and Canadian Federalism: A Survey of the Issues,” Canadian Public Policy 6 (1980), 182CrossRefGoogle Scholar; Courchene, Thomas J., “Energy Revenues: Consequences for the Rest of Canada,” Canadian Public Policy 6 (1980), 192CrossRefGoogle Scholar; Norrie, Kenneth, “Energy, Canadian Federalism and the West,” Publius 14 (1984), 79–91Google Scholar; and Ruitenbeek, Jack, “Economics of In-Situ Oilsands Production: Some Implications for Public Policy,” Canadian Public Policy 11 (1985), 407–14.CrossRefGoogle Scholar

³¹ Helliwell, and McRae, , “Resolving the Energy Conflict.”Google Scholar

³² Zagare, , Game Theory, 37.Google Scholar

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³⁴ Helliwell, John F. and McRae, Robert N., “The National Energy Conflict,” Canadian Public Policy 7 (1981), 20.CrossRefGoogle Scholar

³⁵ The Globe and Mail, November 1, 1980, 1.Google Scholar

³⁶ Doern, and Toner, , The Politics of Energy, 312Google Scholar; Helliwell, and McRae, , “The National Energy Conflict”Google Scholar and “Resolving the Energy Conflict.”

³⁷ Uslaner, , Shale Barrel Politics, 177.Google Scholar

³⁸ Helliwell, and McRae, , “Resolving the Energy Conflict.”Google Scholar

³⁹ Uslaner, (Shale Barrel Politics, 174)Google Scholar compared rent shares for Albertans to those of Canadians outside of Alberta (as computed by Helliwell, and McRae, , “The National Energy Conflict,” 17Google Scholar), rather than looking at the rents accruing directly to the governments. However, for present purpuses, that would build in an undesired element of pure conflict. In the sequential game, F also had a long-term interest in every province's degree of satisfaction with the result. Although it wanted to limit A's revenues, an extreme outcome would spell a virtual end to further national integration. To incorporate this federal priority, it is appropriate to look at overall revenues. Given the nature of the data generated by Helliwell and McRae, that entails a comparison of federal-provincial rents.

⁴⁰ James, , “The Canadian National Energy Program.”Google Scholar

⁴¹ The cumulative rents over the life of each scenario also would be a useful indicator of relative worth. However, devising a means of comparison among O₁ through O₄ is complicated by the need to decide a relevant “lifetime” for each scenario, along with the performance of calculations further removed from the original data.

⁴² Helliwell, and McRae, , “Resolving the Energy Conflict,” 14.Google Scholar

⁴³ Helliwell, and McRae, , “The National Energy Conflict.”Google Scholar Another aspect concerns the comparability of statistics. Other reliable sources do not provide data on the complete set of outcomes. Examples are Gorbet, F. W., “Energy Self-Sufficiency: A Realistic and Desirable Goal?,” Canadian Public Policy 6 (1980), 472–80CrossRefGoogle Scholar, and Copithorne, Lawrence, MacFadeyn, Alan and Bell, Bruce, “Revenue Sharing and the Efficient Valuation of Natural Resources,” Canadian Public Policy 11 (1985), 465–78.CrossRefGoogle Scholar

⁴⁴ A game is considered strictly ordinal when all preferences over outcomes are expressed as “X is better than Y,” as opposed to permitting weak preferences such as “X is at least as good or better than Y.”

⁴⁵ The game corresponds to #63 and #47 in the respective lists from Brams, Steven J., “Deception in 2 × 2 Games,” Journal of Peace Science 2 (1977), 171–203CrossRefGoogle Scholar, and Rapoport, Anatol and Guyer, M., “A Taxonomy of 2 × 2 Games,” General Systems: Yearbook of the Society for General Systems Research 13 (1966), 195–201.Google Scholar

⁴⁶ Brams, Steven J. and Wittman, Donald, “Nonmyopic Equilibria in 2 × 2 Games,” Conflict Management and Peace Science 6 (1981), 39–62.CrossRefGoogle Scholar

⁴⁷ See, for example, Deutsch, Karl W., The Analysis of International Relations (3rd ed.; Englewood Cliffs: Prentice-Hall, 1988), 156.Google Scholar

⁴⁸ See Selten, R., “Chain-Store Paradox,”Google Scholar Working Paper no. 18, Institute of Mathematical Economics, Universitat Bielefeld. In Ordeshook's presentation of the Paradox, specification of the players' strategies entails estimates of probabilities that can change over iterations of the game; for example, at each stage it is necessary to update the probability that a potential antagonist believes that the principal player (known as the “chain store”) will resist competition. See Ordeshook, Peter C., Game Theory and Political Theory: An Introduction (Cambridge: Cambridge University Press, 1986), 451–62.CrossRefGoogle Scholar

⁴⁹ A few possibilities would include potash in Saskatchewan, hydro-electric power produced in Newfoundland, sulphur in Alberta and pulpwood in British Columbia. See Bushnell, S. I., “The Control of Natural Resources through the Trade and Commerce Power and Property Rights,” Canadian Public Policy 6 (1980), 313–24CrossRefGoogle Scholar; Copithorne, Lawrence, “Natural Resources and Regional Disparities: A Skeptical View,” Canadian Public Policy 5 (1979), 181–94CrossRefGoogle Scholar; and Laforest, Gerald V., “Jurisdiction over Natural Resources: Provincial and Federal,” in Crabbe, Philippe and Spry, Irene M., eds., Natural Resources Development in Canada: Multi-Disciplinary Seminar (Ottawa: University of Ottawa Press, 1973).Google Scholar

⁵⁰ Brams, and Wittman, , “Nonmyopic Equilibria.”Google Scholar

⁵¹ Brams, Steven J. and Hessel, Marek P., “Threat Power in Sequential Games,” International Studies Quarterly 28 (1984), 26.CrossRefGoogle Scholar

⁵² Ibid.

⁵³ Ibid., 27.

⁵⁴ Ibid.

⁵⁵ Ibid., 29.

⁵⁶ Ibid., 33.

⁵⁷ Ibid., 30.

⁵⁸ For a helpful discussion of risk-taking and brinkmanship, see Dixit, Avinash K. and Nalebuff, Barry J., Thinking Strategically (New York: W. W. Norton, 1991), 286–99.Google Scholar

⁵⁹ Uslaner, , Shale Barrel Politics, 174, 176Google Scholar; and Helliwell, and McRae, , “The National Energy Conflict,” 17.Google Scholar

⁶⁰ Uslaner, (Shale Barrel Politics, 176)Google Scholar found CC to be the “Nash solution” to the bargaining problem of maximizing the product of joint gains for A and F relative to the stalemate.

⁶¹ One other factor points toward F's preference for the stalemate: following A's retaliation, the pricing and taxation incentives and subsidies in the NEP would make exploration in the Canada Lands even more attractive than before.

⁶² Young, Robert A., “Political Scientists, Economists, and the Canada-US Free Trade Agreement,” Canadian Public Policy 15 (1989), 54.CrossRefGoogle Scholar

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⁶⁴ Helliwell, John F. et al. , “The Western Accord and Lower World Oil Prices,” Canadian Public Policy 12 (1986), 344.CrossRefGoogle Scholar

⁶⁵ Pollard, , “Canadian Energy Policy in 1985,” 169Google Scholar. The Accord called for the deregulation of domestic crude oil prices as of June 1, 1985, effectively dismantling the complex, two-tier pricing system which had been established by the 1981 Agreement. It marked the end of the Petroleum Compensation Charge (PCC) and the Oil Export Charge (OEC). The Accord also removed all transportation subsidies in the energy sector and every control on shortterm oil exports. Furthermore, it eliminated the IORT and the NGGLT. Although already at zero and thus not major financial concerns of the negotiators, the removal of these taxes had symbolic importance. The Accord also saw the phasing out of the Petroleum Incentives Payments (PIP), which Alberta followed up with termination of its own, similar program (Helliwell, et al. , “The Western Accord,” 344).Google Scholar

⁶⁶ Helliwell, et al. , “The Western Accord,” 342.Google Scholar

⁶⁷ For an introduction to the concept of a scientific research enterprise, consult James, Patrick, “Neorealism as a Research Enterprise: Toward Elaborated Structural Realism,” International Political Science ReviewGoogle Scholar, forthcoming.