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Climate Change and Game Theory: a Mathematical Survey

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  • Wood, Peter John
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    This paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from noncooperative game theory, cooperative game theory, and implementation theory. We examine the solutions to games where players have a continuous choice about how much to pollute, and games where players make decisions about treaty participation. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is also examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and their policy implications. These mechanisms could make cooperation on climate change mitigation more likely.

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    File URL: http://purl.umn.edu/249379
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    Paper provided by Australian National University, Centre for Climate Economics & Policy in its series Working Papers with number 249379.

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    Date of creation: Oct 2010
    Handle: RePEc:ags:ancewp:249379
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    Web page: http://www.crawford.anu.edu.au/research_units/eerh/
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