Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2015-01-27
Revision-Date: 2017-07-07
Number: 15-015/VIII
Author-Name: Erik Ansink
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Author-Name: Hans-Peter Weikard
Author-Workplace-Name: Wageningen University
Author-Name: Cees Withagen
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Title: International Environmental Agreements with Support
Abstract: We augment the standard cartel formation game from non-cooperative coalition theory, often applied in the context of international environmental agreements, with the possibility that singletons support coalition formation without becoming coalition members themselves. We assume their support takes the form of a monetary transfer to the coalition, in order to induce larger coalitions, higher levels of public good provision and higher payoffs. We show that, under mild conditions on the costs and benefits of contributing to the public good (e.g. abatement of greenhouse gas emissions), there exist equilibria with support. Allowing for support increases payoffs to each of three types of agents: members, supporters and free-riders.
Classification-JEL: C72, D02, H41, Q54
Keywords: Coalition formation; Public goods; Support; Transfers; International Environmental Agreements
File-Url: https://papers.tinbergen.nl/15015.pdf
File-Format: application/pdf
File-Size: 222796 bytes
Handle: RePEc:tin:wpaper:20150015