Examining impact and benefit agreements in mineral extraction using game theory and multiple-criteria decision making

• IBA analysis methods fail to consider sustainability criteria. • MCDM and game theory are used to analyze IBAs. • Multiple value systems and the implications of cooperation/conflicts are considered. • Alternative flexibility provides a higher chance for bargaining cooperation. This research takes a novel approach to analyzing impact and benefit agreements (IBA) using multiple-criteria decision making (MCDM) and game theory. Local communities, which are often Indigenous communities, face with difficult decisions regarding the trade-offs of impacts vs. benefits from mineral resource development. Analyses of IBAs typically focus on their economic benefits but fail to consider environmental, socio-cultural, and other sustainability criteria. By not considering these criteria, current methods struggle to predict if an IBA is adequate or if it will be accepted. This research develops a model with MCDM that balances complex sustainability trade-offs for communities during mineral development negotiations. Bargaining positions of companies or impacted communities are also an essential, yet understudied factor in IBA analyses. Game theory is employed to show how bargaining positions can affect the compensation included in an IBA. In all, this research develops a model that can consider different criteria, value systems, and the implications of cooperation or competition to predict if an IBA will be accepted. This study provides recommendations, which can be applied other resource development projects which impact communities. The model shows the importance of flexibility in design, power dynamics in bargaining, cooperation, and knowledge sharing.