International Environmental Agreements with mixed strategies and investment

Fuhai Hong and Larry Karp

Journal of Public Economics, 2012, vol. 96, issue 9-10, 685-697

Abstract: We modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result: with mixed strategies, equilibrium participation and welfare are higher in equilibria that involve higher investment.

Keywords: International Environmental Agreement; Climate agreement; Participation game; Investment; Mixed strategy (search for similar items in EconPapers)
JEL-codes: C72 H4 Q54 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (37)

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Working Paper: International environmental agreements with mixed strategies and investment (2012)
Working Paper: International Environmental Agreements with Mixed Strategies and Investment (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:96:y:2012:i:9:p:685-697

DOI: 10.1016/j.jpubeco.2012.05.003

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