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Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision

Author

Listed:
  • Wolfgang Buchholz

    (Department of Economics, University of Regensburg)

  • Alexander Haupt

    (School of Management (Plymouth Business School))

  • Wolfgang Peters

    (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))

Abstract

In this paper, we explore the relationship between an equitable distribution of the cost shares in cooperative public good provision and the core property of Pareto-optimal allocations. Core allocations do not only fulfil an important stability condition but are also the only promising candidates for efficient public good allocations that are acceptable to all parties in a negotiation process. In particular, our analysis shows that it is an unequal distribution of costs that motivates a coalition of countries to stand alone and to block an initially given Pareto-optimal allocation. In our approach, distributional equity of individual public good contributions is assessed by a specif-ic sacrifice measure (the “Moulin sacrifice”), which is derived from the egalitarian-equivalent concept suggested by Moulin (1987).

Suggested Citation

  • Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2014. "Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision," Discussion Paper Series RECAP15 16, RECAP15, European University Viadrina, Frankfurt (Oder).
    • Handle: RePEc:euv:dpaper:16
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    References listed on IDEAS

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    Cited by:

    1. Michael Finus & Bianca Rundshagen, 2016. "Game Theory and Environmental and Resource Economics—In Honour of Alfred Endres, Part Two," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 1-4, September.
    2. Acocella, Nicola & Di Giovanni, Tomasz, 2019. "Natural Resources and Environment Preservation: Strategic Substitutability vs. Complementarity in Global and Local Public Good Provision," International Review of Environmental and Resource Economics, now publishers, vol. 13(3-4), pages 203-227, September.

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    More about this item

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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