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Inequality, Communication and the Avoidance of Disastrous Climate Change

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  • Alessandro Tavoni

    ()
    (Grantham Research Institute, London School of Economics)

  • Astrid Dannenberg

    (Centre for European Economic Research, Mannheim, Germany)

  • Giorgos Kallis

    ()
    (ICTA, Universidad Autonoma de Barcelona)

  • Andreas Löschel

    (Centre for European Economic Research, Mannheim, Germany)

Abstract

International efforts to provide global public goods often face the challenges of coordinating national contributions and distributing costs equitably in the face of uncertainty, inequality, and free-riding incentives. In an experimental setting, we distribute endowments unequally among a group of people who can reach a fixed target sum through successive money contributions, knowing that if they fail they will lose all their remaining money with 50% probability. We find that inequality reduces the prospects of reaching the target, but that communication increases success dramatically. Successful groups tend to eliminate inequality over the course of the game, with rich players signalling willingness to redistribute early on. Our results suggest that coordinative institutions and early redistribution from richer to poorer nations may widen our window of opportunity to avoid global climate calamity.

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Bibliographic Info

Paper provided by Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University in its series CCEP Working Papers with number 1103.

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Date of creation: Mar 2011
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Handle: RePEc:een:ccepwp:1103

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  1. CCEP Paper Published in PNAS
    by David Stern in Stochastic Trend on 2011-07-08 00:01:00
  2. Two New CCEP Papers
    by David Stern in Stochastic Trend on 2011-03-27 11:50:00
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Cited by:
  1. Scott Barrett & Astrid Dannenberg, 2014. "On the Sensitivity of Collective Action to Uncertainty about Climate Tipping Points," CESifo Working Paper Series 4643, CESifo Group Munich.
  2. Jordi Teixidó-Figueras & Juan Antonio Duro, 2013. "The building blocks of international ecological footprint inequality: a regression-based decomposition," Working Papers XREAP2013-03, Xarxa de Referència en Economia Aplicada (XREAP), revised Apr 2013.
  3. Todd Cherry & David McEvoy, 2013. "Enforcing Compliance with Environmental Agreements in the Absence of Strong Institutions: An Experimental Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(1), pages 63-77, January.
  4. Elisabeth Gsottbauer & Jeroen den Bergh, 2013. "Bounded rationality and social interaction in negotiating a climate agreement," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 13(3), pages 225-249, September.
  5. Karen Pittel & Dirk Rübbelke, 2013. "International Climate Finance and Its Influence on Fairness and Policy," The World Economy, Wiley Blackwell, vol. 36(4), pages 419-436, 04.
  6. Brekke, Kjell Arne & Konow , James & Nyborg, Karine, 2012. "Cooperation Is Relative: Income and Framing Effects with Public Goods," Memorandum 16/2012, Oslo University, Department of Economics.
  7. Brick, Kerri & Van der Hoven, Zoe & Visser, Martine, 2012. "Cooperation and Climate Change: Can Communication Facilitate the Provision of Public Goods in Heterogeneous Settings?," Discussion Papers dp-12-14-efd, Resources For the Future.
  8. Scott Barrett & Astrid Dannenberg, 2014. "Negotiating to Avoid "Gradual" versus "Dangerous" Climate Change: An Experimental Test of Two Prisoners' Dilemma," CESifo Working Paper Series 4573, CESifo Group Munich.
  9. Simon Dietz & Carmen Marchiori & Alessandro Tavoni, 2012. "Domestic Politics and the Formation of International Environmental Agreements," Working Papers 2012.76, Fondazione Eni Enrico Mattei.
  10. Noussair, C.N. & Soest, D.P. van, 2014. "Economic Experiments and Environmental Policy: A Review," Discussion Paper 2014-001, Tilburg University, Center for Economic Research.
  11. Maxwell Burton-Chellew & Robert May & Stuart West, 2013. "Combined inequality in wealth and risk leads to disaster in the climate change game," Climatic Change, Springer, vol. 120(4), pages 815-830, October.
  12. Astrid Dannenberg & Andreas Löschel & Gabriele Paolacci & Christiane Reif & Alessandro Tavoni, 2011. "Coordination under threshold uncertainty in a public goods game," Working Papers 2011_20, Department of Economics, University of Venice "Ca' Foscari", revised Nov 2011.
  13. Peter H. Kriss & George Loewenstein & Xianghong Wang & Roberto A. Weber, 2011. "Behind the veil of ignorance: Self-serving bias in climate change negotiations," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 6(7), pages 602-615, October.
  14. Olivier Bochet & Jeremy Laurent-Lucchetti & Justin Leroux & Bernard Sinclair-Desgagné, 2013. "Collective Dangerous Behavior: Theory and Evidence on Risk-Taking," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 13101, Institut d'Economie et Econométrie, Université de Genève.

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