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Voluntary Commitment to Environmental Protection: A Bounded Rationality Approach

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Global environmental protection is characterized as a public good. In contrast to the national level where the state is able to regulate external effects, there is a lack of supranational institutions which have enough power to force countries to reduce pollution levels. In spite of the free-riding problem it can nevertheless be observed that countries sometimes commit themselves to contribute to the public good `environmental protection'. The case of the Kyoto protocol for global $CO_2$ reduction demonstrates that some countries make substantial volunatry contributions, but others do not or on a much less level. The paper provides a game-theoretic explanation how the free-riding-problem can be overcome to some extent by voluntary cooperative behavior. It is analysed under which conditions free-riding countries can be motivated to make at least small pollution reduction efforts.

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File URL: http://www.wiwi.uni-jena.de/Papers/wp-sw2204.pdf
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Paper provided by Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät in its series Jenaer Schriften zur Wirtschaftswissenschaft with number 22/2004.

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Date of creation: Sep 2004
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Publication status: Published in Bleischwitz, R., Budzinski, O. (Eds.), Environmental Economics: Institutions, Competition, Rationality.
Handle: RePEc:jen:jenasw:2004-22

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Keywords: global environmental policy; public good; voluntary cooperation; bounded rationality; game theory.;

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  1. Roland Helm & Michael Steiner & Armin Scholl & Laura Manthey, 2004. "A Comparative Empirical Study on Common Methods for Measuring Preferences," Jenaer Schriften zur Wirtschaftswissenschaft 20/2004, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  2. Roland Helm & Michaela Ludl, 2004. "Kundenkarten als Kundenbindungsinstrument des Handels," Jenaer Schriften zur Wirtschaftswissenschaft 07/2004, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
  3. Uwe Cantner & Werner Gueth & Andreas Nicklisch & Torsten Weiland, 2003. "Competition in Innovation and Imitation - A Theoretical and Experimental Study -," Papers on Strategic Interaction 2004-02, Max Planck Institute of Economics, Strategic Interaction Group.
  4. Uwe Cantner & Kristina Dreßler & Jens J. Krüger, 2004. "Firm Survival in the German Automobile Industry," Jenaer Schriften zur Wirtschaftswissenschaft 08/2004, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
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