Potentially Harmful International Cooperation on Global Public Good Provision

Wolfgang Buchholz (), Richard Cornes and Dirk Rübbelke

Economica, 2014, vol. 81, issue 322, 205-223

Abstract: type="main" xml:id="ecca12074-abs-0001">

Experience from climate policy suggests that full cooperation among all countries is not a likely outcome. In this paper we therefore consider the case where only members of a subgroup of countries cooperate by reciprocally matching their public good contributions. In a two-stage game, matching rates are set at stage 1 then national contributions are chosen at stage 2. In the case of small coalitions, negative matching may result in the subgame-perfect equilibrium that decreases global public good provision and outsiders' welfare. Moreover, a growing number of countries may paradoxically entail a reduction of equilibrium public good supply.

Date: 2014
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Related works:
Working Paper: Potentially Harmful International Cooperation on Global Public Good Provision (2012)
Working Paper: Potentially Harmful International Cooperation on Global Public Good Provision (2012)
Working Paper: Potentially Harmful International Cooperation on Global Public Good Provision (2012)
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