IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Bounded rationality and social interaction in negotiating a climate agreement

  • Elisabeth Gsottbauer

    ()

  • Jeroen den Bergh

    ()

An agreement on climate change mitigation hinges on large-scale international cooperation. Rational agents are supposed to consider the cost and benefits of cooperation, which then determine their negotiation positions. Behavioral economics provides experimental evidence that decision-making in negotiation-like situations is influenced by systematic cognitive biases and social interaction. In this paper, we examine the impact of bounded rationality and social preferences on bargaining in international climate negotiations and illustrate how particular deviations from full rationality affect the incentives to cooperate. Of special interest are fairness preferences for burden-sharing rules and behavioral responses to different framings of climate change and policy, as well as implications of these for communication about climate change. The analysis will further address different levels of representation, including individual citizens, politicians, experts, and (professional) negotiators. The consequences of the most prominent nonstandard preferences and biases for negotiating a climate treaty are assessed, and specific strategies to foster cooperation are suggested. Copyright Springer Science+Business Media B.V. 2013

If 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.

File URL: http://hdl.handle.net/10.1007/s10784-012-9182-1
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal International Environmental Agreements: Politics, Law and Economics.

Volume (Year): 13 (2013)
Issue (Month): 3 (September)
Pages: 225-249

as
in new window

Handle: RePEc:spr:ieaple:v:13:y:2013:i:3:p:225-249
Contact details of provider: Web page: http://www.springer.com/economics/journal/10784

Order Information: Web: http://link.springer.de/orders.htm

References listed on IDEAS
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.:

as in new window
  1. Valentina Bosetti & Carlo Carraro & Massimo Tavoni, 2009. "Climate Change Mitigation Strategies in Fast-Growing Countries: The Benefits of Early Action," CESifo Working Paper Series 2742, CESifo Group Munich.
  2. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
  3. Alessandro Tavoni & Astrid Dannenberg & Giorgos Kallis & Andreas Löschel, 2011. "Inequality, Communication and the Avoidance of Disastrous Climate Change," CCEP Working Papers 1103, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  4. W. J. Wouter Botzen & Jeroen C.J.M. van den Bergh, 2009. "Bounded Rationality, Climate Risks, and Insurance: Is There a Market for Natural Disasters?," Land Economics, University of Wisconsin Press, vol. 85(2), pages 265-278.
  5. Cardenas, Juan Camilo & Stranlund, John & Willis, Cleve, 2002. "Economic inequality and burden-sharing in the provision of local environmental quality," Ecological Economics, Elsevier, vol. 40(3), pages 379-395, March.
  6. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  7. Daniel McFadden, 1998. "Rationality for Economists?," Working Papers 98-09-086, Santa Fe Institute.
  8. Brekke, Kjell Arne & Johansson-Stenman, Olof, 2008. "The Behavioural Economics of Climate Change," Working Papers in Economics 305, University of Gothenburg, Department of Economics.
  9. Jason F. Shogren & Laura O. Taylor, 2008. "On Behavioral-Environmental Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(1), pages 26-44, Winter.
  10. Charness, Gary & Dufwenberg, Martin, 2003. "Promises & Partnership," Research Papers in Economics 2003:3, Stockholm University, Department of Economics.
  11. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  12. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  13. Tatsuyoshi, S. & Nakamura, H., 1995. "The 'Spite' Dilema in Voluntary Contribution Mechanism Experiments," ISER Discussion Paper 0370, Institute of Social and Economic Research, Osaka University.
  14. Scott Barrett & Robert Stavins, 2003. "Increasing Participation and Compliance in International Climate Change Agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 3(4), pages 349-376, December.
  15. Ernst Fehr & Karla Hoff & Mayuresh Kshetramade, 2008. "Spite and Development," American Economic Review, American Economic Association, vol. 98(2), pages 494-99, May.
  16. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August.
  17. Jeffrey Carpenter, 2002. "When In Rome: Conformity and the Provision of Public Goods," Middlebury College Working Paper Series 0217, Middlebury College, Department of Economics.
  18. Varian, Hal R., 1974. "Equity, envy, and efficiency," Journal of Economic Theory, Elsevier, vol. 9(1), pages 63-91, September.
  19. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
  20. Dean Karlan & Nava Ashaf & Wesley Yin, 2004. "Tying odysseus to the mast: Evidence from a commitment savings product in the philippines," Natural Field Experiments 00206, The Field Experiments Website.
  21. Fehr, Ernst & Schmidt, Klaus M., 1999. "A theory of fairness, competition, and cooperation," Munich Reprints in Economics 20650, University of Munich, Department of Economics.
  22. Bowman, David & Minehart, Deborah & Rabin, Matthew, 1999. "Loss aversion in a consumption-savings model," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 155-178, February.
  23. Barrett, Scott & Toman, Michael, 2010. "Contrasting future paths for an evolving global climate regime," Policy Research Working Paper Series 5164, The World Bank.
  24. Nentjes, Andries & Klaassen, Ger, 2004. "On the quality of compliance mechanisms in the Kyoto Protocol," Energy Policy, Elsevier, vol. 32(4), pages 531-544, March.
  25. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
  26. Rege, Mari & Telle, Kjetil, 2004. "The impact of social approval and framing on cooperation in public good situations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1625-1644, July.
  27. Ernst Fehr & Urs Fischbacher, 2002. "Why Social Preferences Matter -- The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives," Economic Journal, Royal Economic Society, vol. 112(478), pages C1-C33, March.
  28. Bowles, Samuel & Gintis, Herbert, 2004. "Persistent parochialism: trust and exclusion in ethnic networks," Journal of Economic Behavior & Organization, Elsevier, vol. 55(1), pages 1-23, September.
  29. Metcalf, Gilbert E., 1994. "Economics and rational conservation policy," Energy Policy, Elsevier, vol. 22(10), pages 819-825, October.
  30. John M. Gowdy, 2007. "Behavioral Economics and Climate Change Policy," Rensselaer Working Papers in Economics 0701, Rensselaer Polytechnic Institute, Department of Economics.
  31. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
  32. Sergey V. Paltsev, 2001. "The Kyoto Protocol: Regional and Sectoral Contributions to the Carbon Leakage," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 53-80.
  33. Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
  34. Gharad Bryan & Dean Karlan & Scott Nelson, 2010. "Commitment Devices," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 671-698, 09.
  35. Falk, Armin & Fehr, Ernst & Fischbacher, Urs, 2005. "Driving Forces Behind Informal Sanctions," IZA Discussion Papers 1635, Institute for the Study of Labor (IZA).
  36. Congleton, Roger D, 1992. "Political Institutions and Pollution Control," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 412-21, August.
  37. Gary Charness & Martin Dufwenberg, 2004. "Promises and Partnership," Levine's Bibliography 122247000000000001, UCLA Department of Economics.
  38. Ted O'Donoghue & Matthew Rabin, 1997. "Incentives for Procrastinators," Discussion Papers 1181, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  39. Viscusi, W Kip, 1989. " Prospective Reference Theory: Toward an Explanation of the Paradoxes," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 235-63, September.
  40. Younas, Javed, 2008. "Motivation for bilateral aid allocation: Altruism or trade benefits," European Journal of Political Economy, Elsevier, vol. 24(3), pages 661-674, September.
  41. Frank P. Maier-Rigaud & Peter Martinsson & Gianandrea Staffiero, 2005. "Ostracism and the Provision of a Public Good, Experimental Evidence," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2005_24, Max Planck Institute for Research on Collective Goods.
  42. Daniel Kahneman & Dan Lovallo, 1993. "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking," Management Science, INFORMS, vol. 39(1), pages 17-31, January.
  43. Andreas Lange, 2006. "The Impact of Equity-preferences on the Stability of International Environmental Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(2), pages 247-267, 06.
  44. John A. Doukas & Dimitris Petmezas, 2007. "Acquisitions, Overconfident Managers and Self-attribution Bias," European Financial Management, European Financial Management Association, vol. 13(3), pages 531-577.
  45. Loewenstein, George & Prelec, Drazen, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 573-97, May.
  46. Markus Glaser & Martin Weber, 2007. "Overconfidence and trading volume," The Geneva Papers on Risk and Insurance Theory, Springer, vol. 32(1), pages 1-36, June.
  47. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  48. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  49. Rand, David Gertler & Dreber, Anna & Fudenberg, Drew & Ellingson, Tore & Nowak, Martin A., 2009. "Positive Interactions Promote Public Cooperation," Scholarly Articles 3804483, Harvard University Department of Economics.
  50. Babiker, Mustafa H., 2001. "Subglobal climate-change actions and carbon leakage: the implication of international capital flows," Energy Economics, Elsevier, vol. 23(2), pages 121-139, March.
  51. Baland, Jean-Marie & Platteau, Jean-Philippe, 1999. "The Ambiguous Impact of Inequality on Local Resource Management," World Development, Elsevier, vol. 27(5), pages 773-788, May.
  52. Barrett, Scott, 2005. "Environment and Statecraft: The Strategy of Environmental Treaty-Making," OUP Catalogue, Oxford University Press, number 9780199286096, March.
  53. Onno Kuik & Reyer Gerlagh, 2003. "Trade Liberalization and Carbon Leakage," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 97-120.
  54. Richard Howarth & Richard Norgaard, 1993. "Intergenerational transfers and the social discount rate," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(4), pages 337-358, August.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:spr:ieaple:v:13:y:2013:i:3:p:225-249. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)

or (Christopher F Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.