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Providing global public goods under uncertainty

Vincent Boucher and Yann Bramoullé

Journal of Public Economics, 2010, vol. 94, issue 9-10, 591-603

Abstract: We study how uncertainty and risk aversion affect international agreements to supply global public goods. We consider a benchmark model with homogeneous countries and linear payoffs. When countries directly contribute to a public good, uncertainty tends to lower signatories' efforts but may increase participation. Despite risk aversion, uncertainty may improve welfare. In contrast, when countries try to reduce a global public bad, uncertainty tends to increase signatories' efforts and decrease participation. In that case, an ex-ante reduction of uncertainty may have a large positive multiplier effect on welfare.

Keywords: Global; public; goods; Climate; change; International; agreements; Uncertainty; Risk; aversion (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (35)

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