Bargaining for an efficient and fair allocation of emission permits to developing countries

Harold Houba and Hans Kremers

No 331600, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The paper focusses on the negotiations between the developed countries currently implementing emission permit markets versus the developing countries who want to join this market. We model the negotiations according to the ’Alternating Offers Bargaining’ model. The objective is to obtain an efficient and fair allocation of tradeable emission permits between these two players. At each period, one player proposes a feasible allocation of the goods for both players. Then the other player either ends the negotiations by accepting the proposal, or prolongs them by rejecting it. The proposal is accepted if this player considers it fair. If rejected, there is a certain probability that the next round is played and the other player making a proposal. The equilibrium concept in this model is that of a subgame perfect equilibrium.

Keywords: International Development; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 31
Date: 2007
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https://ageconsearch.umn.edu/record/331600/files/3179.pdf (application/pdf)

Related works:
Working Paper: Bargaining for an Efficient and Fair Allocation of Emission Permits to Developing Countries (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331600

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