Sunk Capital and Negotiated Resolutions of Environmental Conflicts
Two nations seek a cooperative agreement to control bilateral flows of an industrial pollutant. From previous noncooperative production choices, the nations hold a certain amount of sunk capital. If production requires relatively large investments in sunk capital, the nations may find that they cannot negotiate production quotas that improve on their noncooperative choices. When the nations find cooperation worthwhile, negotiated levels of production will be higher than in the absence of sunk capital. Furthermore, both nations are motivated to attempt to manipulate the terms of the agreement by making strategic investments in sunk capital prior to its completion.
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.
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.
When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:75:y:1999:i:1:p:142-155. 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: ()
If references are entirely missing, you can add them using this form.