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Bounded rationality and social interaction in negotiating a climate agreement

Elisabeth Gsottbauer () and Jeroen van den Bergh

International Environmental Agreements: Politics, Law and Economics, 2013, vol. 13, issue 3, 225-249

Abstract: An agreement on climate change mitigation hinges on large-scale international cooperation. Rational agents are supposed to consider the cost and benefits of cooperation, which then determine their negotiation positions. Behavioral economics provides experimental evidence that decision-making in negotiation-like situations is influenced by systematic cognitive biases and social interaction. In this paper, we examine the impact of bounded rationality and social preferences on bargaining in international climate negotiations and illustrate how particular deviations from full rationality affect the incentives to cooperate. Of special interest are fairness preferences for burden-sharing rules and behavioral responses to different framings of climate change and policy, as well as implications of these for communication about climate change. The analysis will further address different levels of representation, including individual citizens, politicians, experts, and (professional) negotiators. The consequences of the most prominent nonstandard preferences and biases for negotiating a climate treaty are assessed, and specific strategies to foster cooperation are suggested. Copyright Springer Science+Business Media B.V. 2013

Keywords: Bounded rationality; Climate change; Cooperation; Decision biases; International treaty; Other-regarding preferences (search for similar items in EconPapers)
Date: 2013
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