IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The acid rain game as a resource allocation process with an application to the cooperation among Finland, Russia, and Estonia

Listed author(s):
  • KAITALA, Veijo

    (The BEIJER International Institute of Ecological Economics, The Royal Swedish Academy of Sciences, Box 50005, S-10405 Stockolm, Sweden)

  • MÄLER, Karl

    (Systems Analysis Laboratory, Helsinki University of Technology, Espoo, Finland)

  • TULKENS, Henry


    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

We consider optimal cooperation in transboundary air pollution abatement among several countries under incomplete information. The countries negotiate on establishing a gradual cooperative emission reduction program to reduce the damages caused by sulphur depositions. Local information available on the marginal emission abatement costs and damage costs allows one to determine directions ofemission abatement in each country that converge to an economic optimum. A particular difficulty arising here is how the partners can guarantee that the costs and benefits from cooperation will be shared in such a way that none of them will be tempted to breach the agreement. To overcome this problem, we make use of a cost sharing scheme proposed by Chander and Thlkens (1991), that results from appropriately designed international transfers. This scheme guarantees that the individual costs of all parties are non increasing along the path towards the optimum and that no party or group of parties has an interest in proposing another abatement policy. The paper illustratess these methods by applying them to a three-country version of Maler's (1989) "acid rain game", tailored to numerically stimulate the negociations on sulphur emissions abatement between Finland, Russia, and Estonia.

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:
Download Restriction: no

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1992042.

in new window

Date of creation: 01 Jun 1992
Handle: RePEc:cor:louvco:1992042
Contact details of provider: Postal:
Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)

Phone: 32(10)474321
Fax: +32 10474304
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

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:cor:louvco:1992042. 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: (Alain GILLIS)

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.