Modesty Pays: Sometimes!

Michael Finus ()

No 2004.68, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Standard non-cooperative game theoretical models of international environmental agreements (IEAs) draw a pessimistic picture of the prospective of successful cooperation: only small coalitions are stable that achieve only little. However, there also exist IEAs with higher participation and more success. In order to explain this phenomenon, this paper departs from the standard assumption of joint welfare maximization of coalition members, implying ambitious abatement targets and strong free-riding. Instead, it considers that countries agree on modest emission reduction targets. This may sufficiently raise participation so that the success of treaties improves in terms of global emission reduction and global welfare. Thus, modesty may pay, though the first best optimum cannot be achieved.

Keywords: International environmental agreements; Internal&external stability; Modest emission reduction (search for similar items in EconPapers)
JEL-codes: C72 H41 Q20 (search for similar items in EconPapers)
Date: 2004-04
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.68

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