Strategic Alignment and Evolutionary Stability in Cross-Border Energy Cooperation: A Game-Theoretic Approach Based on China–Kyrgyzstan Energy Projects

Abstract

Cross-border energy cooperation presents a critical pathway for regional infrastructure integration, yet its sustainability hinges on reconciling divergent national priorities with long-term institutional stability. This study investigates strategic alignment and evolutionary stability in China–Kyrgyzstan energy collaboration through a formal game-theoretic lens. We model bilateral interactions as an asymmetric repeated game incorporating differential discount factors, asymmetric information about domestic regulatory capacity, and stochastic exogenous shocks-including hydrological variability, geopolitical volatility, and tariff policy shifts. Using replicator dynamics under bounded rationality, we identify evolutionarily stable strategies (ESS) that persist across varying institutional trust thresholds and investment horizons. Calibration draws on the documented institutional record of three flagship hydropower interconnection initiatives-Kambarata-1, the Naryn cascade and Toktogul-over the 2018–2023 window, including tariff implementation delays, contractual dispatch and certification provisions, technology-transfer commitments and dispute resolution timelines. Because none of these projects had accumulated a complete operating record within that window-substantive construction at Kambarata-1 began in 2022, the Naryn cascade investment agreement was signed in July 2023, and the core Toktogul modernisation works fall in 2025-the model is calibrated on planning, contracting and early-construction evidence and should be read as a scenario-based appraisal rather than as a fit to operating data. Results demonstrate that stability emerges not from symmetry of commitment, but from adaptive reciprocity: Kyrgyzstan's willingness to accept phased technology transfer correlates strongly with China's tolerance for delayed revenue realization-yielding a co-evolving equilibrium where both parties incrementally internalize cooperative norms. Crucially, the model reveals a narrow 'stability corridor' bounded by minimum trust thresholds (≥0.62 on a 0–1 scale) and maximum permissible asymmetry in enforcement capacity (≤37% disparity). Outside this corridor, non-cooperation cascades dominate-even under high aggregate investment. These findings challenge conventional assumptions about scale-driven cooperation and underscore the centrality of procedural legitimacy, temporal flexibility, and calibrated risk-sharing in sustaining transboundary energy governance.