Low Earth orbit is starting to look less like pristine frontier and more like a crowded shipping lane, with fragments of old rockets and defunct satellites threatening the next generation of spacecraft. As launch costs fall and operators race to deploy vast constellations, the economics of cleaning up this junk have lagged far behind the economics of putting more hardware into the sky. The idea now gaining traction is that tools from cooperative game theory, especially Nash-style bargaining, might finally give operators a way to share the costs and benefits of debris removal without waiting for a perfect global treaty.
Instead of treating orbital debris as a purely technical or diplomatic headache, I see it increasingly framed as a bargaining problem: who pays, who benefits, and how to divide the gains from a safer orbit. From proposals that use Nash bargaining to split revenues between debris “remediators” and satellite operators, to fee systems that charge for cleanup the way cities charge for trash collection, the question is whether these models can turn a classic tragedy of the commons into a workable business deal.
The debris crisis as a strategic game
The starting point is grimly simple: rising launch cadences have produced a surge in fragments, dead satellites, and upper stages that now crowd key orbital bands. Analysts describe how this growing cloud of junk raises collision risks for every spacecraft, yet the cost of removing debris or designing more robust end-of-life systems still falls on individual operators. In that setting, each company has a strong incentive to keep launching and hope others pay for cleanup, a pattern that game theorists recognize as a textbook collective action problem.
Researchers have already framed this as a strategic interaction where each player chooses whether to invest in mitigation or active removal, knowing that the benefits of a cleaner orbit are shared by all. One study of large constellations notes that, in the relevant Nash equilibrium, the players launch more satellites than in the jointly optimal solution, which is exactly the kind of overuse that drives the space commons toward instability. Another analysis of active debris removal warns that if everyone waits for someone else to act, the risk is a catastrophic outcome that could undermine the entire business of exploiting the Earth orbital environment, a dynamic laid out in a detailed Jun report on the space debris dilemma.
Why unilateral rules and engineering fixes are not enough
Regulators have tried to push back with technical standards and unilateral rules, but those tools only go so far in a global commons. In low Earth orbit, or LEO, the general guideline is that spacecraft must deorbit, also known as decay, or be placed in a graveyard orbit within 25 years of the end of their mission, and the Federal Communications Commission has gone further with an FCC Report and Order titled “Adopts New ‘5-Year Rule for Deorbiting Satellites,” a Full Title that underscores how seriously it treats orbital congestion in its Report and Order. These measures reduce the long tail of derelict spacecraft, but they do not directly fund or coordinate the removal of legacy debris that is already up there.
Engineering solutions, from drag sails to autonomous deorbit systems, are advancing quickly, yet they still run into the same economic wall: the operator who pays for extra hardware or a dedicated cleanup mission rarely captures all the benefits. A recent analysis of large satellite constellations explicitly models this tension, explaining that, to keep it simple, the authors assume certain stochastic effects can be approximated by the positive mean of the process and then develop two models, one of which would charge for old debris cleaning, to explore how operators might respond to different pricing schemes, a structure laid out in a detailed Mar study. Without a way to share costs in proportion to shared benefits, even the best technical fixes risk being underused.
From noncooperative races to cooperative bargaining
Game theory has long described how rational actors can lock themselves into bad outcomes, even when better options exist. In noncooperative settings, each player maximizes individual utility without binding agreements, a pattern that has been dissected in military and commercial space contexts where agents choose actions that benefit themselves to the detriment of broader system resilience, as detailed in a Game-Theoretic System Design analysis of space power. The result is familiar: overuse of shared orbits, underinvestment in safety, and a race to launch that ignores long term externalities.
Cooperative game theory, by contrast, asks what happens if players can negotiate and commit to sharing both costs and gains. The Nash Bargaining Solution, or Nash Bargaining Solution (NBS), is one of the most influential tools in that toolkit, defining a fair split of surplus based on each party’s fallback option if talks collapse. In spectrum sharing for the Internet of Things, for example, researchers cast the resource sharing problem as a cooperative game and use the NBS to allocate access in a way that balances efficiency and fairness, arguing that this cooperative approach is a promising paradigm for congested resources, as shown in a detailed study of selective spectrum leasing.
How Nash bargaining actually works
At its core, Nash bargaining is a way to turn a messy negotiation into a precise mathematical problem. Each party has a utility if they reach agreement and a utility if they walk away, and the Nash solution picks the deal that maximizes the product of each side’s gain over that disagreement point, subject to feasibility. In formal treatments, the Nash model considers pairs like (x1t, x2t) in R² that divide an aggregate resource Xt in R, and then asks when we can guarantee that this information is consistent with a bargaining solution, a question explored in depth in a technical paper on the Nash bargaining solution’s refutability that opens with the line “When can we guarantee that this information is consistent with a bargaining solution?”
In practice, that abstract machinery has already been applied to real infrastructure problems. In electricity markets, for instance, Both [27,28] proposed a fair cost sharing method based on Nash bargaining that was designed to stimulate cooperative planning of several energy systems so that all of them can benefit from cooperative planning, as described in a study of trading of electricity. Another paper on regional integrated energy systems argues that, therefore, the revenue from energy sharing needs to be allocated based on Therefore Nash bargaining theory in a fair manner so that each micro energy management group, or MEMG, can benefit from the energy sharing, a conclusion the authors revisit in their After analysis of collaborative energy management.
Translating carbon and energy bargaining to orbital junk
Space debris is not the first global externality to force policymakers to think about fair burden sharing. Climate policy has already leaned on bargaining models to allocate emission cuts and carbon quotas in ways that keep high emitters at the table. One asymmetric model of emission quotas argues that current allocation methods, however, pay little attention to the interests of abatement entities, which will hinder the implementation of emission reduction policies, and then uses a bargaining framework to design a quota allocation that can be generalized into other regions, as laid out in an Nov paper on an asymmetric Nash bargaining model where the authors stress that Current methods fall short.
Those lessons map neatly onto orbital debris, where a handful of major operators and launch states generate most of the risk but also have the most to lose from a cascading collision scenario. A recent study highlighted in a feature on whether game theory can help declutter space explains how game theory can propose a commercially viable framework for debris remediation, suggesting a regime where operators pay fees that are then redistributed to remediators via a Nash bargaining solution, and noting that recycling is currently economically unfeasible, a point summarized in the Key Takeaways that also emphasize how Rising launch cadences have dramatically increased orbital debris. In that setup, the bargaining solution plays the same role it does in carbon markets or energy sharing: it turns a vague call for “fairness” into a concrete formula that can be written into contracts and, eventually, regulation.
Designing fees and payoffs for cleanup
For Nash bargaining to work in orbit, someone has to put money on the table. One proposal is to levy operator fees that fund debris removal, essentially treating cleanup as a service paid for by those who use the orbital environment. In a detailed report on debris removal funding, Space debris removal funding is analyzed by a team led by Next Chen and collaborators, who examine ways to incentivize companies into space debris removal and argue that operator fees could align private incentives with the shared benefits of a cleaner orbit. The idea is that those fees would then be allocated to cleanup providers through a bargaining mechanism that reflects each party’s contribution and risk exposure.
Game theorists have already tested similar structures in stylized debris games. One influential paper titled “Space Debris Removal: A Game Theoretic Analysis” uses simulation to build a 6.1 Two–Player Game, explicitly noting that, Using the simulation results of Section 5, they can construct a normal form game that captures how operators respond to different policy levers. Their Analysis shows that without side payments or coordinated incentives, rational players underinvest in removal, but that carefully designed fees and transfers can shift the equilibrium toward more aggressive cleanup.
Why bargaining beats simple command-and-control
One reason Nash-style bargaining is attractive in this context is that it respects the fact that operators are not passive recipients of regulation. In many markets, command-and-control rules that dictate behavior without negotiation can backfire or simply be ignored if enforcement is weak. A study of closed-loop supply chains for power batteries, for example, contrasts bargaining with hierarchical models and notes that, in Stackelberg’s model, participants do not have any form of communication and negotiation, and they can only make decisions sequentially, whereas bargaining is another theory used in this paper to capture more cooperative behavior, as explained in a detailed analysis that opens with the line “In Stackelberg’s model, participants do not have any form of communication and negotiation.”
By contrast, cooperative bargaining frameworks explicitly model communication, side payments, and shared gains, which can make ambitious policies politically and commercially palatable. In mobile edge computing, for instance, one chapter on computation offloading notes that, to solve issues of energy and quality of service, the authors utilize Nash Bargaining Solution (NBS) to encourage mobile devices to participate in a cooperative game with base stations, achieving a power provision that balances efficiency and fairness, as described in a chapter on NBS-Based Mobile Edge Computing. The same logic could apply in orbit, where operators might accept stricter deorbit rules and higher fees if they know the resulting surplus from safer, more predictable orbits will be shared in a way that reflects their bargaining power and risk.
The limits of bargaining in a high-stakes commons
None of this means Nash bargaining is a magic fix. Cooperative solutions still depend on credible enforcement and on players believing that others will stick to the deal. Work on the space debris dilemma has already shown that if everyone waits for someone else to pay for active removal, the joint outcome can be catastrophic, a pattern that mirrors other high-stakes games where mutual cooperation is possible but fragile. One analysis of human and artificial intelligence interactions notes that even though there exists a mutually cooperative option with reasonably good outcomes for both parties, the Even Nash equilibrium can still lead to bad consequences, a tragic waste for all, as argued in a piece on rewriting the game between humans and AGI.
Space debris negotiations face similar structural risks. If a few major actors refuse to join a bargaining regime, or if enforcement of operator fees and deorbit rules is patchy, the cooperative surplus that Nash bargaining is supposed to divide may never materialize. A second feature on whether game theory can help declutter space notes that a recent study employs game theory to propose a commercially viable framework for debris remediation, suggesting a regime where operators pay fees that are then redistributed to remediators via a Nash bargaining solution, but also stresses that such a framework depends on regulators and industry agreeing on the rules of the game, as summarized in a Dec analysis of how a Nash bargaining solution could channel payments to remediators.
What a bargaining-based debris regime might look like
Putting the pieces together, a realistic bargaining-based debris regime would likely combine unilateral rules, operator fees, and negotiated cost sharing. Regulators such as the FCC would continue to tighten deorbit timelines and licensing conditions, while international bodies and industry groups would define a fee schedule tied to collision risk, satellite mass, and orbital altitude. Those fees would flow into a fund that pays cleanup providers, with the distribution of contracts and revenues determined by a Nash-style bargaining formula that accounts for each actor’s fallback options and contributions, much as energy sharing revenues are allocated in regional systems using cooperative bargaining.
In parallel, I would expect to see more detailed simulation work that mirrors the “Space Debris Removal: A Game Theoretic Analysis” approach, using analysis and simulation to test how different bargaining rules affect launch behavior over decades. The large constellation models that already show players launching more satellites in the Nash equilibrium than in the jointly optimal solution, as detailed in the Large satellite constellations study, could be extended to include side payments and bargaining-based fees, revealing whether a carefully tuned regime can pull the system closer to the cooperative frontier. If those models show that bargaining can both reduce debris and keep launch markets profitable, the economics of space junk might finally start to look less like a tragedy and more like a solvable negotiation.
More from MorningOverview