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Transferable and non transferable utility implementations of coalitional stability in integrated assessment models

Author

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  • KORNEK, Urik

    () (Postdam Institute for Climate Impact Research)

  • LESSMANN, Kai

    (Postdam Institute for Climate Impact Research)

  • TULKENS, Henry

    () (Université catholique de Louvain, CORE, Belgium)

Abstract

To study the stability of coalitions in the standard game theoretic model of international environmental agreements, two alternative concepts are used: potential internal stability and core stability. Both concepts make use of the possibility of reallocating payoffs within a coalition through transfers, formulated in terms of transferable utility among the players. For international applications where players are countries, such as done in the growing literature on integrated assessment models, non-transferable utility games would be economically better suited. In this note, we provide a framework for comparing the treatment of coalitions in five game theoretically minded integrated assessment models, from that point of view. Under way, we extend the definition of the two stability concepts to games without transferable utility, assuming instead the transferability of some physical good. We also show that potential internal stability and blocking power of coalitions can be tested by solving a simple optimization problem.

Suggested Citation

  • KORNEK, Urik & LESSMANN, Kai & TULKENS, Henry, 2014. "Transferable and non transferable utility implementations of coalitional stability in integrated assessment models," CORE Discussion Papers 2014035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2014035
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    File URL: http://uclouvain.be/cps/ucl/doc/core/documents/coredp2014_35web.pdf
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    References listed on IDEAS

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    17. repec:spr:thdlic:978-3-540-72945-7 is not listed on IDEAS
    18. Kai Lessmann & Ulrike Kornek & Valentina Bosetti & Rob Dellink & Johannes Emmerling & Johan Eyckmans & Miyuki Nagashima & Hans-Peter Weikard & Zili Yang, 2014. "The Stability and Effectiveness of Climate Coalitions: A Comparative Analysis of Multiple Integrated Assessment Models," Working Papers 2014.05, Fondazione Eni Enrico Mattei.
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    Cited by:

    1. Kai Lessmann & Ulrike Kornek & Valentina Bosetti & Rob Dellink & Johannes Emmerling & Johan Eyckmans & Miyuki Nagashima & Hans-Peter Weikard & Zili Yang, 2015. "The Stability and Effectiveness of Climate Coalitions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 811-836, December.
    2. repec:spr:ieaple:v:17:y:2017:i:6:d:10.1007_s10784-017-9352-2 is not listed on IDEAS

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