A simple dynamic climate cooperation model

Eugen Kovac and Robert C. Schmidt

Journal of Public Economics, 2021, vol. 194, issue C

Abstract: We introduce a novel framework for analyzing coalition formation, applied to climate cooperation. Our model allows for multiple rounds of negotiations and is able to explain the formation of large coalitions. The incentive of each coalition member to join and subsequently to sign a long-term contract is to prevent inefficient delay that arises as soon as a single country deviates. This undermines the free-rider incentive that destabilizes large coalitions in static coalition formation games. The equilibrium coalition size is then determined by a “threshold effect” due to which deviations of coalition members become unprofitable for sufficiently large coalitions.

Keywords: Climate treaty; Coalition; Dynamic game; Coordination; Delay (search for similar items in EconPapers)
JEL-codes: D62 F53 H23 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 (15)

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Working Paper: A simple dynamic climate cooperation model (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:194:y:2021:i:c:s0047272720301936

DOI: 10.1016/j.jpubeco.2020.104329

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