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A Mechanism for Addressing Compliance and Participation in Global Public Good Treaties: A Comment

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  • Michael Finus

    (University of Graz, Austria)

Abstract

Kornek and Edenhofer (2020) propose a transfer scheme in the spirit of mechanism design in a two-stage coalition formation game. Not only non-signatories but also signatories choose their provision levels non-cooperatively. They show that the grand coalition is stable, implementing the socially optimal provision level. McEvoy and McGinty (2023) argue in a comment that this scheme is flawed as it does not address free-riding in the sense of non-compliance. I offer a solution to the problem highlighted by McEvoy and McGinty (2023), proposing a modification of the original set-up which addresses both dimensions of free-riding. I demonstrate that the scheme also works for asymmetric countries.

Suggested Citation

  • Michael Finus, 2024. "A Mechanism for Addressing Compliance and Participation in Global Public Good Treaties: A Comment," Graz Economics Papers 2024-14, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2024-14
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    References listed on IDEAS

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    1. Wolfgang Buchholz & Todd Sandler, 2021. "Global Public Goods: A Survey," Journal of Economic Literature, American Economic Association, vol. 59(2), pages 488-545, June.
    2. McEvoy, David M. & McGinty, Matthew, 2023. "The problem of financing global public goods," European Economic Review, Elsevier, vol. 153(C).
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    7. Haeringer, Guillaume, 2004. "Equilibrium binding agreements: a comment," Journal of Economic Theory, Elsevier, vol. 117(1), pages 140-143, July.
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    Keywords

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    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
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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