Asymmetry, optimal transfers and international environmental agreements

Jonathan Colmer ()

No 66, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: This paper applies optimal sharing rules to a coalition formation game with positive externalities, demonstrating the effectiveness of well-designed transfer schemes in improving outcomes for participation in International Environmental Agreements. A numerical exercise is conducted, providing proof of the failure of the conventional transfer schemes (Shapley value, Nash bargaining solution, Chander Tulkens transfer scheme) to meet the existence, robustness and optimality conditions set by the optimal sharing rule literature. The core result is derived from a systematic analysis of the effect that the degree of full, mean-preserving asymmetry on the formation of stable self-enforcing coalitions, under two dfferent conditions: transfers and no transfers. The effectiveness of, and participation in, International Environmental Agreements is found to increase with the degree of asymmetry under the optimal sharing rule.

Date: 2011-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.lse.ac.uk/GranthamInstitute/wp-content/ ... rs-environmental.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lsg:lsgwps:wp66

Access Statistics for this paper

More papers in GRI Working Papers from Grantham Research Institute on Climate Change and the Environment Contact information at EDIRC.
Bibliographic data for series maintained by The GRI Administration ().