How Social Preferences Influence the Stability of a Climate Coalition

Yu-Hsuan Lin

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines the impact of social preferences on the individual incentives of participating in climate coalitions with laboratory experimental evidences. The theoretical result suggests that, when a player was inequality-neutral, a dominant strategy equilibrium could exist. However, individuals with social preference may lead a vacillated coalition formation. Joining or not joining depend on the player was critical or non-critical to an effective coalition respectively. The laboratory experimental result shows that players were inequality-averse and the coalition was usually larger than the equilibrium size but unstable. The inequality-averse attitudes have significantly positive impact on the incentives of participation. Particularly, when they are non-critical players, egalitarians are likely to give up the free riding benefit by joining a coalition. Our findings help to understand the climate coalition formation.

Keywords: international environmental agreements; social preference; inequality-aversion; experimental design; climate coalition (search for similar items in EconPapers)
JEL-codes: C91 D63 D71 Q54 Q58 (search for similar items in EconPapers)
Date: 2018-03
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-env, nep-exp, nep-gth, nep-ict and nep-upt
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https://mpra.ub.uni-muenchen.de/85428/1/MPRA_paper_85428.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/87714/1/MPRA_paper_87714.pdf revised version (application/pdf)

Related works:
Journal Article: How social preferences influence the stability of a climate coalition (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:85428

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