Advantageous leadership in public good provision: the case of an endogenous contribution technology

Wolfgang Buchholz () and Michael Eichenseer
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Michael Eichenseer: University of Regensburg

Journal of Economics, 2019, vol. 126, issue 1, No 1, 17 pages

Abstract: Abstract From the perspective of standard public good theory the total amount of greenhouse gas mitigation (or public good supply in general) will be lower in a leader–follower (Stackelberg) game than in a simultaneous Nash game so that strategic leadership is disadvantageous for climate policy. We show that this needs no longer be true when the leading country has the option to employ a technology by which it can reduce its abatement costs and thus improve the productivity of its contribution technology. Then both countries also are better off in the Stackelberg game than in the Nash game. Our general result is illustrated by an example with Cobb–Douglas preferences and, finally, an empirical application to global climate policy is briefly discussed.

Keywords: Public goods; Leadership; Choice of technology; Climate policy (search for similar items in EconPapers)
JEL-codes: C72 H41 O31 Q54 Q55 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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Working Paper: Advantageous Leadership in Public Good Provision: The Case of an Endogenous Contribution Technology (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:126:y:2019:i:1:d:10.1007_s00712-018-0613-5

DOI: 10.1007/s00712-018-0613-5

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