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Public Good Agreements under the Weakest-link Technology

Author

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  • Alejandro Caparros

    (Consejo Superior de Investigaciones Científicas)

  • Michael Finus

    (University of Bath)

Abstract

We analyze the formation of public good agreements under the weakest-link technol-ogy. Cooperation on migration policies, money laundering measures and biodiversityconservation e§orts are prime examples of this technology. Whereas for symmetricplayers, policy coordination is not necessary, for asymmetric players cooperation mat-ters but fails, in the absence of transfers. In contrast, with an optimal transfer scheme,asymmetry may not be an obstacle but an asset for cooperation. Counterintuitively, avery skewed distribution of interests may allow even the grand coalition being stable.We characterize various types and degrees of asymmetry and relate them to the stabil-ity of agreements and associate gains from cooperation. We compare our results withthose obtained under the well-known summation technology and demonstrate that theycan be derived under much more general conditions.

Suggested Citation

  • Alejandro Caparros & Michael Finus, 2016. "Public Good Agreements under the Weakest-link Technology," Department of Economics Working Papers 52/16, University of Bath, Department of Economics.
  • Handle: RePEc:eid:wpaper:58129
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    Cited by:

    1. Alejandro Caparrós & Michael Finus, 2020. "Public good agreements under the weakest‐link technology," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 555-582, June.
    2. Robert J. R. Elliott & Ingmar Schumacher & Cees Withagen, 2020. "Suggestions for a Covid-19 Post-Pandemic Research Agenda in Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 1187-1213, August.
    3. Alejandro Caparrós & Michael Finus, 2020. "The Corona-Pandemic: A Game-Theoretic Perspective on Regional and Global Governance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 913-927, August.
    4. Alejandro Caparrós & Esther Blanco & Philipp Buchenauer & Michael Finus, 2020. "Team Formation in Coordination Games with Fixed Neighborhoods," Working Papers 2004, Instituto de Políticas y Bienes Públicos (IPP), CSIC.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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