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International Cooperation Behind the Veil of Uncertainty – The Case of Transboundary Acidification

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Author Info
Carsten Helm ()

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Abstract

The complexities of international environmental problems are only poorly understood. Hence, decision makers have to negotiate about abatement measures even though they do not know the 'true' model of the ecological system and have only a rough idea about the costs and benefits of their action. It will be analysed to what extent this kind of 'model uncertainty' – where players do not only have incomplete information about the payoff functions of the other players, but also about their own payoff function – affects the prospects of international cooperation. Using a simple game-theoretic model, it is shown how countries can use the veil of uncertainty to hide their distributional interests. The arguments are based on a deviation from the common prior assumption, which seems particularly questionable in a setting comprising various countries with different cultural and scientific backgrounds. Finally the model will prove useful to quantitatively and qualitatively illustrate the central role of model uncertainty in the negotiations of the first Sulphur Protocol signed to combat transboundary acidification. Copyright Kluwer Academic Publishers 1998

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File URL: http://hdl.handle.net/10.1023/A:1008215711692
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 12 (1998)
Issue (Month): 2 (September)
Pages: 185-201
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Handle: RePEc:kap:enreec:v:12:y:1998:i:2:p:185-201

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Web page: http://www.springerlink.com/link.asp?id=100263

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Related research
Keywords: acid rain; international negotiations; model uncertainty; transboundary pollution;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, vol. 55(1), pages 1-18, January. [Downloadable!] (restricted)
  2. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August. [Downloadable!] (restricted)
  3. Frankel, Jeffrey A & Rockett, Katharine E, 1988. "International Macroeconomic Policy Coordination When Policymakers Do Not Agree on the True Model," American Economic Review, American Economic Association, vol. 78(3), pages 318-40, June. [Downloadable!] (restricted)
  4. Arrow, Kenneth J & Fisher, Anthony C, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, MIT Press, vol. 88(2), pages 312-19, May. [Downloadable!] (restricted)
  5. Gough, C. A. & Bailey, P. D. & Biewald, B. & Kuylenstierna, J. C. I. & Chadwick, M. J., 1994. "Environmentally targeted objectives for reducing acidification in Europe," Energy Policy, Elsevier, vol. 22(12), pages 1055-1066, December. [Downloadable!] (restricted)
  6. Arrow, Kenneth J & Lind, Robert C, 1970. "Uncertainty and the Evaluation of Public Investment Decisions," American Economic Review, American Economic Association, vol. 60(3), pages 364-78, June.
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  1. Jungcurt, Stefan, 2004. "The Politics of Incoherence: A Framework for the Analysis of Functional Overlap in International Governance as Two-Level Game," Institutional Change in Agriculture and Natural Resources Discussion Papers 18841, Humboldt University Berlin, Institute for Agricultural Economic and Social Sciences. [Downloadable!]
  2. Stefan Jungcurt, 2004. "The Politics of Incoherence - A Framework for the Analysis of Functional Overlap in International Governance as Two-Level Game," ICAR Discussion Papers (Institutional Change in Agriculture and Natural Resources) 0204, Division of Resource Economics, Department of Agricultural Economics and Social Sciences, Humboldt University Berlin. [Downloadable!]
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