International environmental agreements: coordinated action under foresight

Effrosyni Diamantoudi () and Eftichios Sartzetakis ()

Economic Theory, 2015, vol. 59, issue 3, 527-546

Abstract: We examine the formation of international environmental agreements (IEAs). We extend the existing literature by endogenizing the reaction of the IEA’s members to a deviation by a group of members. We assume that when a group of countries contemplates exiting or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which the solution always exists and fully characterize the coalitionally farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported and are always Pareto efficient. Copyright Springer-Verlag Berlin Heidelberg 2015

Keywords: Environmental agreements; Foresight; Stable set; D6; Q5; C7 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (24)

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DOI: 10.1007/s00199-014-0837-8

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