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Avoiding an uncertain catastrophe: climate change mitigation under risk and wealth heterogeneity

Thomas C. Brown () and Stephan Kroll
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Thomas C. Brown: U.S. Forest Service
Stephan Kroll: Colorado State University

Climatic Change, 2017, vol. 141, issue 2, 155-166

Abstract: Abstract For environmental problems such as climate change, uncertainty about future conditions makes it difficult to know what the goal of mitigation efforts should be, and inequality among the affected parties makes it hard for them to know how much they each should do toward reaching the goal. We examine the effects of scientific uncertainty and wealth inequality in experiments where subjects decide how much to contribute toward reducing a common threat. We also explore how the framing of uncertainty affects collective action. Our results suggest that uncertainty lowers contributions, but contributions remain surprisingly high even in treatments with a variable loss probability, where such behavior is individually suboptimal (and where the underlying game is a prisoner’s dilemma). Further, we find that the characterization of uncertainty is crucial and that inequality need not lower contributions at all.

Keywords: Nash Equilibrium; Payoff; Income Inequality; Loss Probability; Scientific Uncertainty (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:spr:climat:v:141:y:2017:i:2:d:10.1007_s10584-016-1889-5