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Providing global public goods under uncertainty

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Author Info

  • Boucher, Vincent
  • Bramoullé, Yann

Abstract

We study how uncertainty and risk aversion affect international agreements to supply global public goods. We consider a benchmark model with homogeneous countries and linear payoffs. When countries directly contribute to a public good, uncertainty tends to lower signatories' efforts but may increase participation. Despite risk aversion, uncertainty may improve welfare. In contrast, when countries try to reduce a global public bad, uncertainty tends to increase signatories' efforts and decrease participation. In that case, an ex-ante reduction of uncertainty may have a large positive multiplier effect on welfare.

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File URL: http://www.sciencedirect.com/science/article/B6V76-509W735-1/2/c13e4a0ad76e5c97211c4cc4ccb135ab
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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 94 (2010)
Issue (Month): 9-10 (October)
Pages: 591-603

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Handle: RePEc:eee:pubeco:v:94:y:2010:i:9-10:p:591-603

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Global public goods Climate change International agreements Uncertainty Risk aversion;

References

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Citations

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Cited by:
  1. Fuhai HONG & Larry KARP, 2013. "International Environmental Agreements with Endogenous or Exogenous Risk," Economic Growth centre Working Paper Series 1310, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
  2. Shreyasee Das, 2012. "State Rights over Water and Agricultural Productivity: Evidence from the Krishna Basin," Working Papers 12-03, UW-Whitewater, Department of Economics.
  3. Jérémy Laurent-Lucchetti & Justin Leroux & Bernard Sinclair-Desgagné, 2011. "Splitting an Uncertain (Natural) Capital," Cahiers de recherche 11-01, HEC Montréal, Institut d'économie appliquée.
  4. May Elsayyad & Florian Morath, 2013. "Technology Transfers for Climate Change," CESifo Working Paper Series 4521, CESifo Group Munich.
  5. Sylvain Dessy & Caroline Orset & Legrand Yémélé Kana, 2012. "The Global Fight against Child Trafficking: How Can It Be Won ?," Cahiers de recherche 1213, CIRPEE.
  6. Michael Finus & Pedro Pintassilgo & Alistair Ulph, 2014. "International Environmental Agreements with Uncertainty, Learning and Risk Aversion," CESifo Working Paper Series 4589, CESifo Group Munich.
  7. Bruno Nkuiya & Walid Marrouch & Eric Bahel, 2011. "International environmental agreements under endogenous uncertainty," Working Papers e07-32, Virginia Polytechnic Institute and State University, Department of Economics.
  8. Finus, Michael & Pintassilgo, Pedro, 2013. "The role of uncertainty and learning for the success of international climate agreements," Journal of Public Economics, Elsevier, vol. 103(C), pages 29-43.

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