Income Heterogeneity and Communication in Global Public Goods

The stabilization of the world’s climate is a perfect case of a collective action problem that— because the efforts by an individual country have little effect—requires coordination among countries in order to attain desirable outcomes. Experimental evidence suggests that one way of attaining such coordination is by allowing for interaction and negotiation among heterogeneous agents and/or groups of such agents. In this paper we test experimentally the potential gains of interaction among heterogeneous agents in the presence of a collective action problem such as climate change negotiations. This research has direct implication for advising policy makers and country officials at climate negotiations in order to achieve an international climate change agreement. Addressing affirmatively this research question should advice officials about the convenience to act together, or in country-blocks, when negotiating green-house gas (GHG) emission reductions for the next international climate change agreement.