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A core-theoretic solution for the design of cooperative agreements on transfrontier pollution

Author

Listed:
  • CHANDER, P.
  • TULKENS, H.

Abstract

For a simple economic model of transfrontier pollution, widely used in theoretical studies of international treaties bearing on joint abatement, we exhibit in this paper a scheme for sharing national abatement costs, through international financial transfers, which is inspired by a very classical solution concept offered in the theory of cooperative games, namely the "core" of a game. The scheme has the following properties: (i) total damage and abatement costs in all countries are minimized (optimality property), and (ii) no "coalition", Le. subset, of countries can achieve lower such total costs for its members by taking another course of action in terms of emissions and/or transfers, under some reasonable assumption as to the reactions of those not in the coalition (core property).
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Suggested Citation

  • Chander, P. & Tulkens, H., 1995. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution," LIDAM Reprints CORE 1158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1158
    DOI: 10.1007/BF00877502
    Note: In : International Tax and Public Finance, 2 (2), 279-293, 1995
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