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Self-Enforcing Environmental Agreements with the Optimal Intensity of Cooperation

Author

Listed:
  • Thomas Eichner

    (University of Hagen)

  • Mark Schopf

    (University of Hagen)

Abstract

This paper analyzes international environmental agreements in three-stage games consisting of a membership subgame, the signatories’ decision on the intensity of cooperation, and an emissions subgame. Signatories may act as Stackelberg leaders or play Nash. In the Stackelberg game, the highest intensity of cooperation between signatories is optimal. In the Nash game, a moderate or the highest intensity of cooperation is optimal if emissions are strategic substitutes. In this case the equilibrium emissions and the stable coalition of the Nash game with optimal cooperation intensity are identical to the equilibrium emissions and the stable coalition of the Stackelberg game with the highest cooperation intensity. Finally, we apply our results to coalition formation games of the literature. In the applied Nash games, optimizing with respect to the cooperation intensity may enlarge the stable coalition up to the grand coalition which implements the first best.

Suggested Citation

  • Thomas Eichner & Mark Schopf, 2025. "Self-Enforcing Environmental Agreements with the Optimal Intensity of Cooperation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(2), pages 249-278, February.
    • Handle: RePEc:kap:enreec:v:88:y:2025:i:2:d:10.1007_s10640-024-00927-1
    DOI: 10.1007/s10640-024-00927-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Optimal intensity of cooperation; Stable coalition; Nash; Stackelberg;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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