Sober optimism and the formation of international environmental agreements

Larry Karp and Hiroaki Sakamoto

Journal of Economic Theory, 2021, vol. 197, issue C

Abstract: We analyze a dynamic model of international environmental agreements where countries cannot make long-term commitments or use sanctions or rewards to induce cooperation. The equilibrium is a Markov chain, not a particular coalition. A large and effective coalition is an absorbing state, reached after a random succession of short-lived ineffective coalitions. Reaching such a coalition requires that the endogenous probability of “success” in any negotiating round is neither too small nor too large, a circumstance we describe as “sober optimism”: the understanding that cooperation is possible but not easy to achieve. An empirical application illustrates the importance of sober optimism in creating a climate agreement.

Keywords: Environmental agreements; Climate change; Dynamic game (search for similar items in EconPapers)
JEL-codes: C72 C73 D62 H41 Q54 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053121001381
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Sober optimism and the formation of international environmental agreements (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:197:y:2021:i:c:s0022053121001381

DOI: 10.1016/j.jet.2021.105321

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().