International Environmental Agreements with Mixed Strategies and Investment
AbstractWe modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and alsoreverses the policy implication of that result: with mixed strategies, equilibriumparticipation and welfare is higher in equilibria that involve higher investment.
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Bibliographic InfoPaper provided by Department of Agricultural & Resource Economics, UC Berkeley in its series Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series with number qt0xf976x1.
Date of creation: 08 May 2012
Date of revision:
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Natural Resources and Conservation; Social Sciences; International Environmental Agreement; climate agreement; participation games; investment; mixed strategy;
Other versions of this item:
- Hong, Fuhai & Karp, Larry, 2012. "International environmental agreements with mixed strategies and investment," CUDARE Working Paper Series 1129, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- H4 - Public Economics - - Publicly Provided Goods
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-22 (All new papers)
- NEP-ENE-2012-05-22 (Energy Economics)
- NEP-ENV-2012-05-22 (Environmental Economics)
- NEP-GTH-2012-05-22 (Game Theory)
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