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International environmental agreements - The role of foresight

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  • DIAMANTOUDI, Effrosyni
  • SARTZETAKIS, Eftichios

Abstract

We examine the formation of International Environmental Agreements (IEAs). We extend the existing literature by endogenizing the reaction of the IEAs members to a deviation by a member or a group of members. We assume that when a country contemplates exiting or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which there always exists a unique set of farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported but are not always Pareto efficient. We extend the analysis to allow for coordinated action, that is, groups of countries jointly exiting or entering the agreement and fully characterize the coalitionally farsighted stable IEAs.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2002061.

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Date of creation: 00 Oct 2002
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Handle: RePEc:cor:louvco:2002061

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Keywords: international environmental agreements; public good provision; coalition formation; foresight;

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