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Toward Farsightedly Stable International Environmental Agreements, Part two

  • Dritan Osmani
  • Richard S.J. Tol


    (Economic and Social Research Institute, Dublin, Ireland)

We investigate the stability of International Environmental Agreements (IEA) by applying game theory. The paper extends further our previous research on farsightedly stable coalitions and preferred farsightedly stable coalitions (Osmani & Tol 2007). The integrated assessment model FUND provides the cost-bene¯t payo® functions of pollution abatement for sixteen di®erent world regions. The stability concept of d'Aspremont et al. (1983) and farsighted stability of Chwe (1994) are compared. The d'Aspremont stability assumes that players are myopic while the farsighted stability concept captures the perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable and D'Aspremont stable coalitions are found and their improvement to environment and welfare are computed.

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Paper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-149.

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Length: 24 pages
Date of creation: Oct 2007
Date of revision: Oct 2007
Handle: RePEc:sgc:wpaper:149
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  1. Carlo Carraro & Johan Eyckmans & Michael Finus, 2006. "Optimal Transfers and Participation Decisions in International Environmental Agreements," Working Papers 2006_44, Department of Economics, University of Venice "Ca' Foscari".
  2. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer, vol. 26(3), pages 379-401.
  3. Parkash Chander & Henry Tulkens, 2006. "Cooperation, Stability And Self- Enforcement In International Environmental Agreements : A Conceptual Discussion," Microeconomics Working Papers 22565, East Asian Bureau of Economic Research.
  4. Ray, Debraj & Vohra, Rajiv, 1997. "Equilibrium Binding Agreements," Journal of Economic Theory, Elsevier, vol. 73(1), pages 30-78, March.
  5. Chander, Parkash & Tulkens, Henry, 1994. "A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution," Working Papers 897, California Institute of Technology, Division of the Humanities and Social Sciences.
  6. Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
  7. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
  8. Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2006. "Stable International Environmental Agreements: An Analytical Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(2), pages 247-263, 05.
  9. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
  10. Tol, Richard S. J., 2001. "Equitable cost-benefit analysis of climate change policies," Ecological Economics, Elsevier, vol. 36(1), pages 71-85, January.
  11. Asheim, Geir B. & Froyn, Camilla Bretteville & Hovi, Jon & Menz, Fredric C., 2006. "Regional versus global cooperation for climate control," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 93-109, January.
  12. Ioannidis, Alexis & Papandreou, Andreas & Sartzetakis, Eftichios, 2000. "International Environmental Agreements: a Literature Review," Cahiers de recherche 0008, GREEN.
  13. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
  14. DIAMANTOUDI, Effrosyni & SARTZETAKIS, Eftichios, 2002. "International environmental agreements - The role of foresight," CORE Discussion Papers 2002061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  15. Johan Eyckmans, 2001. "On the farsighted stability of the Kyoto Protocol," Energy, Transport and Environment Working Papers Series ete0103, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
  16. Dritan Osmani & Richard S.J. Tol, 2005. "The case of two self-enforcing international agreements for environmental protection," Working Papers FNU-82, Research unit Sustainability and Global Change, Hamburg University, revised May 2006.
  17. Dritan Osmani & Richard S.J. Tol, 2007. "Toward Farsightedly Stable International Environmental Agreements," Working Papers FNU-140, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2007.
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