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Advantageous Leadership in Public Good Provision: The Case of an Endogenous Contribution Technology

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Listed:
  • Wolfgang Buchholz
  • Michael Eichenseer

Abstract

From the perspective of standard public good theory the total amount of greenhouse gas mitigation (or public good supply in general) will be lower in a leader-follower game than in a simultaneous Nash game so that strategic leadership is disadvantageous for climate policy. We show that this need no longer be true when the leading country has the option to employ a technology by which it can reduce its abatement costs and thus improve the productivity of its contribution technology. Our general result is illustrated by an example with Cobb-Douglas preferences and, finally, an empirical application to global climate policy is briefly discussed.

Suggested Citation

  • Wolfgang Buchholz & Michael Eichenseer, 2017. "Advantageous Leadership in Public Good Provision: The Case of an Endogenous Contribution Technology," CESifo Working Paper Series 6352, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_6352
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp6352.pdf
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    References listed on IDEAS

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    1. John Stranlund, 1996. "On the strategic potential of technological aid in international environmental relations," Journal of Economics, Springer, vol. 64(1), pages 1-22, February.
    2. repec:mhr:jinste:urn:sici:0932-4569(201806)172:2_351:sdalit_2.0.tx_2-u is not listed on IDEAS
    3. Wolfgang Buchholz & Kai Konrad, 1994. "Global environmental problems and the strategic choice of technology," Journal of Economics, Springer, vol. 60(3), pages 299-321, October.
    4. Ihori, Toshihiro, 1996. "International public goods and contribution productivity differentials," Journal of Public Economics, Elsevier, vol. 61(1), pages 139-154, July.
    5. Brandt, Urs Steiner, 2004. "Unilateral actions, the case of international environmental problems," Resource and Energy Economics, Elsevier, vol. 26(4), pages 373-391, December.
    6. Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
    7. Keisuke Hattori & Mai Yamada, 2018. "Skill Diversity and Leadership in Team Production," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(2), pages 351-374, June.
    8. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, August.
    9. Richard Cornes & Roger Hartley, 2007. "Aggregative Public Good Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(2), pages 201-219, April.
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    11. Varian, Hal R., 1994. "Sequential contributions to public goods," Journal of Public Economics, Elsevier, vol. 53(2), pages 165-186, February.
    12. Keisuke Hattori, 2005. "Is Technological Progress Pareto-Improving for a World with Global Public Goods?," Journal of Economics, Springer, vol. 84(2), pages 135-156, March.
    13. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
    14. Stefano Barbieri, 2012. "Communication and Early Contributions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 14(3), pages 391-421, June.
    15. Gregor Schwerhoff, 2016. "The economics of leadership in climate change mitigation," Climate Policy, Taylor & Francis Journals, vol. 16(2), pages 196-214, March.
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    More about this item

    Keywords

    public goods; leadership; choice of technology; climate policy;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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