EconPapers    
Economics at your fingertips  
 

Collective action in an asymmetric world

Cuicui Chen and Richard Zeckhauser ()

Journal of Public Economics, 2018, vol. 158, issue C, 103-112

Abstract: A central authority possessing tax and expenditure responsibilities can readily provide an efficient level of a public good. Absent a central authority, voluntary arrangements must replace coercive ones, and significant under-provision must be expected. International public goods are particularly challenging due to the substantial asymmetries among nations. Small-interest nations have strong incentives to ride cheaply. Our empirical results reveal cheap riding intentions in providing for climate change mitigation, a critical international public good. The evidence is provided by individual nations' Intended Nationally Determined Contributions voluntarily pledged for the Paris Climate Change Conference. We find that larger nations made much larger pledges in proportion to both their Gross National Incomes and their historical emissions. Implications for the Nordhaus Climate Club and carbon-tax proposals are discussed. To achieve Pareto optimality despite disparate cheap-riding incentives, we propose the Cheap-Riding Efficient equilibrium. That solution takes the Nash equilibrium as a base point, and then applies the principles of either the Nash Bargaining solution or the Lindahl equilibrium to proceed to the Pareto frontier.

Keywords: International public good; Alliance; Nash equilibrium; Lindahl equilibrium; Asymmetric game; Climate change; Greenhouse gas emissions; Climate Club (search for similar items in EconPapers)
JEL-codes: H4 C7 D7 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272717302116
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Collective Action in an Asymmetric World (2016) Downloads
Working Paper: Collective Action in an Asymmetric World (2016) Downloads
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:pubeco:v:158:y:2018:i:c:p:103-112

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2020-01-17
Handle: RePEc:eee:pubeco:v:158:y:2018:i:c:p:103-112