Designing International Environmental Agreements under Participation Uncertainty

Liang Mao

MPRA Paper from University Library of Munich, Germany

Abstract: We analyze the design of optimal international environmental agreement (IEA) by a three-stage coalition formation game. A certain degree of participation uncertainty exists in that each country choosing to sign the IEA for its best interest has a probability to make a mistake and end up a non-signatory. The IEA rule, which specifies the action of each signatory for each coalition formed, is endogenously determined by a designer, whose goal is to maximize the expected payoff of each signatory. We provide an algorithm to determine an optimal rule and compare this rule to some popular rules used in the literature.

Keywords: International environmental agreement; coalition formation; participation uncertainty, stable coalition (search for similar items in EconPapers)
JEL-codes: C72 H41 Q54 (search for similar items in EconPapers)
Date: 2017-05-15
New Economics Papers: this item is included in nep-cdm, nep-env and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79145

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