Coalition-proof stability of international environmental agreements

Ryusuke Shinohara ()
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Ryusuke Shinohara: Hosei University

Environmental Economics and Policy Studies, 2025, vol. 27, issue 2, No 3, 169-202

Abstract: Abstract In a Nash equilibrium of participation games in international environmental agreements, the surplus-sharing rule proposed by Eyckmans and Finus (An almost ideal sharing scheme for coalition games with externalities. FEEM Working Paper No. 155.04, 2004), Carraro et al. (Rev Int Org 1:379–396, 2006), and Weikard (Manchester Sch 77:575–593, 2009) achieves the greatest economic welfare compared with any other feasible surplus-sharing rules. In this paper, we examine the robustness of their rule to multilateral deviations by focusing on a coalition-proof Nash equilibrium. We present a condition in which the rule is welfare-optimal among the feasible surplus-sharing rules in a coalition-proof Nash equilibrium. This condition indicates that the desirability of the rule is also observable in a coalition-proof Nash equilibrium in some cases that existing studies have examined. However, in other cases, their rule may not even accomplish the existence of coalition-proof Nash equilibria. As an alternative, we provide a surplus-sharing rule to achieve an equilibrium for all possible cases.

Keywords: International environmental agreements; Voluntary participation; Surplus-sharing rule; Coalition-proof Nash equilibrium; Proportional cost-sharing rule (search for similar items in EconPapers)
JEL-codes: C72 D62 H41 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10018-024-00426-z

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