Game theory is used to analyze the formation and stability of coalitions for environmental protection. The paper extends further our previous research on farsightedly stable coalitions and preferred farsightedly stable coalitions (Osmani & Tol 2007a). The integrated assessment model FUND provides data for di®erent time horizons as well as the cost-bene¯t function of pollution abatement. This allows for analysis of the evolution in time of farsightedly stable coalitions and their improvement to environment and welfare. Considering multiple farsightedly stable coalitions, the participation in coalitions for environmental protection is signi¯cantly increased, which is a positive result of our game theoretical approach. But the farsighted behavior can not be sustained for a long term which implies that we can not have big coalitions for environmental protection even in "a farsighted world".
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Paper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number
FNU-162.
Find related papers by JEL classification: C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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