Risk pooling in redistributive agreements
We study redistributive agreements designed collectively by individual and independent states for the joint supply of a public good. We specifically model the case of international environmental agreements but our analysis should be equally applicable to other multinational arrangements with redistributive aspects. The basic intuition of the investigated class of mechanisms is that, if part of member GDP is redistributed, then the redistributive resource has lower variance than individual income: a side effect of redistribution is risk-sharing. If, in addition, the sum of contributed parts of individual GDP forms a contest prize pool which returns the contributions as prizes to the participants depending on a relative ranking of public good provision levels, then the mechanism can also implement efficient efforts.
|Date of creation:||Jul 2012|
|Date of revision:|
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- Effrosyni Diamantoudi & Sartzetakis, Eftichios, .
"Stable International Environmental Agreements: An Analytical Approach,"
Economics Working Papers
2001-10, Department of Economics and Business Economics, Aarhus University.
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- Effrosyni Diamantoudi & Eftichios Sartzetakis, 2002. "Stable International Environmental Agreements: An Analytical Approach," Others 0201001, EconWPA.
- Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2001. "Stable International Environmental Agreements: An Analytical Approach," Working Papers 04001, Concordia University, Department of Economics, revised Feb 2003.
- James Banks & Richard Blundell & Agar Brugiavini, 2001.
"Risk Pooling, Precautionary Saving and Consumption Growth,"
Review of Economic Studies,
Oxford University Press, vol. 68(4), pages 757-779.
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- Béatrice Roussillon & Paul Schweinzer, 2010. "Efficient emissions reduction," The School of Economics Discussion Paper Series 1004, Economics, The University of Manchester.
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- Clark, Derek J. & Konrad, Kai A., 2006.
"Contests with multi-tasking,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
125, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Clark, Derek & Konrad, Kai A., 2006.
"Contests with multi-tasking
[Contests with Multi-Tasking]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2006-14, Social Science Research Center Berlin (WZB).
- Clark, Derek J. & Konrad, Kai A., 2007. "Contests with multi-tasking," Munich Reprints in Economics 22095, University of Munich, Department of Economics.
- Clark, Derek & Konrad, Kai A., 2006. "Contests with multi-tasking
- Maria Arbatskaya & Hugo Mialon, 2005. "Two-activity Contests," Emory Economics 0527, Department of Economics, Emory University (Atlanta).
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