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Information Manipulation and Climate Agreements
Author(s) -
Hong Fuhai,
Zhao Xiaojian
Publication year - 2014
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aau001
Subject(s) - ex ante , welfare , perspective (graphical) , value (mathematics) , climate change , information asymmetry , economics , public economics , business , political science , microeconomics , computer science , law , ecology , artificial intelligence , machine learning , biology , macroeconomics
It appears that news media and some pro‐environmental organizations have the tendency to accentuate or even exaggerate the damage caused by climate change. This article provides a rationale for this tendency by using a modified International Environmental Agreement (IEA) model with asymmetric information. We find that the information manipulation has an instrumental value, as it ex post induces more countries to participate in an IEA, which will eventually enhance global welfare. From the ex ante perspective, however, the impact that manipulating information has on the level of participation in an IEA and on welfare is ambiguous.