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How Social Preferences Influence the Stability of a Climate Coalition

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  • Lin, Yu-Hsuan

Abstract

This study examines the impact of social preferences on the individual incentives of participating in climate coalitions with laboratory experimental evidences. The theoretical result suggests that, when a player was inequality-neutral, a dominant strategy equilibrium could exist. However, individuals with social preference may lead a vacillated coalition formation. Joining or not joining depend on the player was critical or non-critical to an effective coalition respectively. The laboratory experimental result shows that players were inequality-averse and the coalition was usually larger than the equilibrium size but unstable. The inequality-averse attitudes have significantly positive impact on the incentives of participation. Particularly, when they are non-critical players, egalitarians are likely to give up the free riding benefit by joining a coalition. Our findings help to understand the climate coalition formation.

Suggested Citation

  • Lin, Yu-Hsuan, 2018. "How Social Preferences Influence the Stability of a Climate Coalition," MPRA Paper 85428, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:85428
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    File URL: https://mpra.ub.uni-muenchen.de/87714/1/MPRA_paper_87714.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    international environmental agreements; social preference; inequality-aversion; experimental design; climate coalition;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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