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Free‐Riding and Cooperation in Environmental Games

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  • ANA ESPINOLA‐ARREDONDO

Abstract

This paper examines the negotiation of an international environmental agreement in which different countries determine the (nonenforceable) promises of investment in clean technologies to be included in the agreement. Furthermore, it analyzes countries' optimal investment in emission‐reducing technologies, considering that, in addition to the utility that a country perceives from an improved environmental quality, it is also concerned about the relative fulfillment of the terms specified in the international agreement either by itself or by others. I show, first, why countries may prefer to shift most promises of investment in clean technologies to other countries, despite the fact that these promises are usually nonenforceable by any international organization. Second, I determine countries' optimal investments in these technologies, and analyze how their particular investments depend on how demanding the international agreement is, and on the importance that countries assign to each others' relative fulfillment of their part of the treaty.

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  • Ana Espinola‐Arredondo, 2009. "Free‐Riding and Cooperation in Environmental Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 119-158, February.
  • Handle: RePEc:bla:jpbect:v:11:y:2009:i:1:p:119-158
    DOI: 10.1111/j.1467-9779.2008.01399.x
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    Cited by:

    1. Ana Espinola-Arredondo & Felix Munoz-Garcia, 2009. "Free-riding in International Environmental Agreements: A Signaling Approach to Non-Enforceable Treaties," Working Papers 2009-08, School of Economic Sciences, Washington State University.
    2. Alfred Endres & Bianca Rundshagen, 2013. "Incentives to Diffuse Advanced Abatement Technology Under the Formation of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 177-210, October.

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