In this article, I make two primary contributions to the literature
on international cooperation. First, I present a simple version of
Fearon's bargaining and enforcement model and show that impatience
(as captured in the discount factor) can be a source of bargaining
strength when the outcome of the bargaining phase is followed by an
enforcement phase that resembles a prisoners' dilemma. Second, I
illustrate how to apply this model to the question of the division of
cartel profits within the Organization of Petroleum Exporting Countries
(OPEC), particularly with regard to the relationship between bargaining
strength and disparate time horizons. I find that for some critical
threshold level, states that discount the future more heavily tend to
receive better oil production offers than those that do not. I examine
empirical evidence that suggests that countries in OPEC fall into the
range where this proposition holds; in other words, relatively poor,
populous countries and relatively unstable ones are allowed by OPEC to
overproduce.I am grateful to Christino
Arroyo, Jim DeNardo, Joe Gochal, James Honaker, Shuhei Kurizaki, Drew
Linzer, Barry O'Neill, Art Stein, Hiroki Takeuchi, George
Tsebelis, Jana von Stein, and two anonymous referees for helpful
comments. I am especially indebted to Ken Schultz for his advice and to
Randy Calvert for a helpful discussion during the 2003 EITM Summer
Institute at Washington University in St. Louis.