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Are Uniform Solutions Focal? – The Case of International Environmental Agreements

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  • Urs Brandt

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Abstract

The application of uniform solutions has several drawbacks, notably their lack of cost efficiency and their inability to guarantee individual rationality. A ‘proper’ specification of uniform solutions, however, reveals that uniform solutions that satisfy individual rationality always exist. When all countries hold private information about their own reduction costs, there only exists one solution that always satisfies individually rationality without use of side payments and the requirement of dominant strategy implementation: The solution that selects the smallest individually preferred uniform reduction which also give a theoretical explanation of the ‘lowest common denominator effect’. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1024432709657
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 25 (2003)
Issue (Month): 3 (July)
Pages: 357-376

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Handle: RePEc:kap:enreec:v:25:y:2003:i:3:p:357-376

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

Related research

Keywords: feasibility constraints; focal solutions; international environmental agreements; uniform solutions;

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  1. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
  2. H. Moulin, 1980. "On strategy-proofness and single peakedness," Public Choice, Springer, vol. 35(4), pages 437-455, January.
  3. Hoel, Michael, 1997. "Coordination of environmental policy for transboundary environmental problems?," Journal of Public Economics, Elsevier, vol. 66(2), pages 199-224, November.
  4. Young, Oran R., 1989. "The politics of international regime formation: managing natural resources and the environment," International Organization, Cambridge University Press, vol. 43(03), pages 349-375, June.
  5. Eyckmans, Johan, 1997. "Nash Implementation of a Proportional Solution to International Pollution Control Problems," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 314-330, July.
  6. Urs Steiner Brandt, 2002. "Actions Prior to Entering an International Environmental Agreement," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 158(4), pages 695-, December.
  7. Johan Eyckmans, 1999. "Strategy Proof Uniform Effort Sharing Schemes For Transfrontier Pollution Problems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(2), pages 165-189, September.
  8. Moulin, Herve & Shenker, Scott, 1992. "Serial Cost Sharing," Econometrica, Econometric Society, vol. 60(5), pages 1009-37, September.
  9. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
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