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Potentially Harmful International Cooperation on Global Public Good Provision

  • Wolfgang Buchholz

    ()

    (Department of Economics, University of Regensburg)

  • Richard Cornes
  • Dirk Rübbelke

Recent international climate negotiations suggest that complete agreements are unlikely to materialize. Instead, partial cooperation between like-minded countries appears a more likely outcome. In this paper we analyze the effects of such partial cooperation between like-minded countries. In doing so, we link the literature on partial cooperation with so-called matching approaches. Matching schemes are regarded as providing a promising approach to overcome undersupply of public goods like climate protection. The functioning of matching mechanisms in a setting with an incomplete agreement, i.e. a contract where only a subset of the players participates, has however not been investigated yet. This paper fills this research gap by analyzing incomplete matching agreements in the context of international climate protection. We analyse their effect on both welfare and the global climate protection level. We show that matching coalitions may bring about a decline in global public good provision and a reduction in the welfare of outsiders.

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File URL: https://www.europa-uni.de/de/forschung/institut/recap15/downloads/recap15_DP005.pdf
File Function: First version, 2012
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Paper provided by RECAP15, European University Viadrina, Frankfurt (Oder) in its series Discussion Paper Series RECAP15 with number 005.

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Length: 22 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:euv:dpaper:005
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  1. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
  2. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2011. "Interior matching equilibria in a public good economy: An aggregative game approach," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 639-645, August.
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  5. Buchholz, Wolfgang & Cornes, Richard & Rübbelke, Dirk, 2012. "Matching as a cure for underprovision of voluntary public good supply," Economics Letters, Elsevier, vol. 117(3), pages 727-729.
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  18. repec:att:wimass:9207 is not listed on IDEAS
  19. Andreoni, James & Bergstrom, Ted, 1996. " Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
  20. Cornes, Richard & Hartley, Roger, 2003. " Risk Aversion, Heterogeneity and Contests," Public Choice, Springer, vol. 117(1-2), pages 1-25, October.
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