Leading the Way: Coalitional Stability in Technological Cooperation & Sequential Climate Policy
AbstractThe World's nations have yet to reach a truly effective treaty to control the emission of greenhouse gases.� The importance of compatibility with private incentives of individual countries has been acknowledged (at least by game theorists) in designing climate policies for the post-Kyoto world.� Individually incentive-compatible agreements, however, may still be spoilt if coalitional incentives to deviate as a group exist.� As a first step toward understanding these incentives from a game-theoretic perspective, we propose a hybrid noncooperative-cooperative game theory model of coalition formation in technology collaboration.� Serious coalitional instabilities inherent to the existing climate policy architectures are revealed.� It turns out that coalitionally stable agreements are achieved via intermediate self-selecting subcoalitions.� The sequence of coalitions forming and the size of the direct and spillover effects of R&D collaboration on countries' individual production technologies determine the effectiveness of the agreements to reduce carbon emissions.� These coalitional group motives are already becoming important in the practice of climate change negotiations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 585.
Date of creation: 01 Dec 2011
Date of revision:
Climate change policy; Coalitions; Cooperative game theory; Environmental agreements; Externalities; Mechanism design; Noncooperative game theory; R&D;
Find related papers by JEL classification:
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public 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-2012-01-03 (All new papers)
- NEP-ENE-2012-01-03 (Energy Economics)
- NEP-ENV-2012-01-03 (Environmental Economics)
- NEP-GTH-2012-01-03 (Game Theory)
- NEP-INO-2012-01-03 (Innovation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bård Harstad, 2010.
"The Dynamics of Climate Agreements,"
CESifo Working Paper Series
2962, CESifo Group Munich.
- Carlo Carraro & Johan Eyckmans & Michael Finus, 2006.
"Optimal Transfers and Participation Decisions in International Environmental Agreements,"
2006_44, Department of Economics, University of Venice "Ca' Foscari".
- Carlo Carraro & Johan Eyckmans & Michael Finus, 2006. "Optimal transfers and participation decisions in international environmental agreements," The Review of International Organizations, Springer, vol. 1(4), pages 379-396, December.
- Carraro, Carlo & Eyckmans, Johan & Finus, Michael, 2005. "Optimal Transfers and Participation Decisions in International Environmental Agreements," CEPR Discussion Papers 5046, C.E.P.R. Discussion Papers.
- Carlo Carraro & Johan Eyckmans & Michael Finus, 2005. "Optimal Transfers and Participation Decisions in International Environmental Agreements," Working Papers 2005.50, Fondazione Eni Enrico Mattei.
- Barrett, Scott, 2005. "The theory of international environmental agreements," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 28, pages 1457-1516 Elsevier.
- Bard Harstad, 2012. "Climate Contracts: A Game of Emissions, Investments, Negotiations, and Renegotiations," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1527-1557.
- Juan-Carlos Altamirano-Cabrera & Michael Finus, 2006. "Permit trading and stability of international climate agreements," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 19-48, May.
- Levy, Philip I & Srinivasan, T N, 1996. "Regionalism and the (Dis)advantage of Dispute-Settlement Access," American Economic Review, American Economic Association, vol. 86(2), pages 93-98, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Caroline Wise).
If references are entirely missing, you can add them using this form.