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How the Rules of Coalition Formation Affect Stability of International Environmental Agreements

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Author Info

  • Michael Finus

    (Department of Economics, Hagen University, Germany)

  • Bianca Rundshagen

    (Department of Economics, Hagen University, Germany)

Abstract

This paper compares stability of international environmental agreements for six different rules of coalition formation under very general conditions (any type of heterogeneity between countries). The rules can be interpreted as different institutional settings in which treaty formations take place and/or different designs of agreements. We consider open and restricted open membership game as well as four exclusive membership games with different degrees of unanimity required to form coalitions. From a policy perspective, counterintuitively, it turns out that stability is higher under exclusive than under open membership and stability increases with the degree of unanimity. We discuss the policy implications of our result for future treaty-making.

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Bibliographic Info

Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2003.62.

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Date of creation: Jul 2003
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Handle: RePEc:fem:femwpa:2003.62

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Related research

Keywords: Non-cooperative game theory; Rules of coalition formation; Stability;

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References

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  1. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
  2. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
  3. Chander, Parkash & Tulkens, Henry, 1994. "The Core of an Economy With Multilateral Environmental Externalities," Working Papers 886, California Institute of Technology, Division of the Humanities and Social Sciences.
  4. Johan Eyckmans & Michael Finus, 2003. "Coalition Formation in a Global Warming Game: How the Design of Protocols Affects the Success of Environmental Treaty-Making," Energy, Transport and Environment Working Papers Series ete0317, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  5. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  6. EYCKMANS, Johan & TULKENS, Henry, 1999. "Simulating coalitionally stable burden sharing agreements for the climate change problem," CORE Discussion Papers 1999026, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
  8. Chander, P. & Tulkens, H., . "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," CORE Discussion Papers RP -1158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Carlo Carraro & Carmen Marchiori & Sonia Oreffice, 2009. "Endogenous Minimum Participation in International Environmental Treaties," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(3), pages 411-425, March.
  10. Carraro, Carlo & Marchiori, Carmen, 2002. "Stable Coalitions," CEPR Discussion Papers 3258, C.E.P.R. Discussion Papers.
  11. Michael Finus & Bianca Rundshagen, 2003. "A Non-cooperative Foundation of Core-Stability in Positive Externality NTU-Coalition Games," Working Papers 2003.31, Fondazione Eni Enrico Mattei.
  12. Finus, Michael & Rundshagen, Bianca, 1998. " Toward a Positive Theory of Coalition Formation and Endogenous Instrumental Choice in Global Pollution Control," Public Choice, Springer, vol. 96(1-2), pages 145-86, July.
  13. Johan Eyckmans & Henry Tulkens, 1999. "Simulating with RICE Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem," CESifo Working Paper Series 228, CESifo Group Munich.
  14. Rubio, S. & Ulph, A., 2002. "A simple dynamic model of international environmental agreements with a stock pollutant," Discussion Paper Series In Economics And Econometrics 0209, Economics Division, School of Social Sciences, University of Southampton.
  15. Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
  16. repec:fth:louvco:9926 is not listed on IDEAS
  17. Michael Finus & Bianca Rundshagen, 1998. "Renegotiation–Proof Equilibria in a Global Emission Game When Players Are Impatient," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(3), pages 275-306, October.
  18. Finus, Michael & Tjotta, Sigve, 2003. "The Oslo Protocol on sulfur reduction: the great leap forward?," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2031-2048, September.
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Citations

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Cited by:
  1. Michael Finus & Ekko van Ierland, 2003. "Stability of Climate Coalitions in a Cartel Formation Game," Working Papers 2003.61, Fondazione Eni Enrico Mattei.
  2. Mélanie HEUGUES, 2009. "Une nouvelle mise en perspective des problèmes environnementaux globaux dans le cas du changement climatique : les impacts de la complémentarité stratégique entre pays," Working Papers 249312, Institut National de la Recherche Agronomique, France.
  3. Porchiung Chou & Cheickna Sylla, 2008. "The formation of an international environmental agreement as a two-stage exclusive cartel formation game with transferable utilities," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 8(4), pages 317-341, December.
  4. Michael Finus & Juan-Carlos Altamirano-Cabrera & Ekko Ierland, 2005. "The effect of membership rules and voting schemes on the success of international climate agreements," Public Choice, Springer, vol. 125(1), pages 95-127, July.
  5. Michael Finus & Johan Eyckmans, 2003. "New Roads to International Environmental Agreements: The Case of Global Warming," Working Papers 2003.88, Fondazione Eni Enrico Mattei.
  6. EYCKMANS, Johan & FINUS, Michael, 2003. "Coalition formation in a global warming game : how the design of protocols affects the success of environmental treaty-making," CORE Discussion Papers 2003088, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Vihang Patel, 2005. "Coalition Strategies and Reduction of GHG Emissions," Game Theory and Information 0501002, EconWPA.
  8. Jones, Benjamin & Keen, Michael & Strand, Jon, 2012. "Fiscal implications of climate change," Policy Research Working Paper Series 5956, The World Bank.

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