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International Environmental Agreements -The Role of Foresight

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  • Effrosyni Diamantoudi
  • Eftichios S. Sartzetakis

    (Department of Economics, University of Aarhus, Denmark)

Abstract

We examine the formation of International Environmental Agreements (IEAs). We extend the existing literature by endogenizing the reaction of the IEA's members to a deviation by a member or a group of members. We assume that when a country contemplates exiting or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which there always exists a unique set of farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported but are not always Pareto efficient. We extend the analysis to allow for coordinated action, that is, groups of countries jointly exiting or entering the agreement and fully characterize the coalitionally farsighted stable IEAs.

Suggested Citation

  • Effrosyni Diamantoudi & Eftichios S. Sartzetakis, "undated". "International Environmental Agreements -The Role of Foresight," Economics Working Papers 2002-10, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2002-10
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    More about this item

    Keywords

    International Environmental Agreements; Public good provision; Coalition formation; Foresight;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other

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