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Climate Policy Negotiations with Incomplete Information
Author(s) -
Konrad Kai A.,
Thum Marcel
Publication year - 2014
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/ecca.12065
Subject(s) - negotiation , complete information , outcome (game theory) , ask price , key (lock) , economics , climate policy , microeconomics , bargaining problem , business , public economics , climate change , political science , computer science , finance , computer security , law , ecology , biology
We analyse bargaining over international climate agreements in a setting with incomplete information about abatement costs. Incomplete information is known as one of the key reasons why negotiations may fail more generally, and why efficiency gains cannot be exploited. We ask whether unilateral commitment to high abatement reduces or increases the likelihood for an efficient negotiation outcome. We find that such commitment behaviour reduces the gains from global cooperation and that, in turn, this reduces the probability of reaching efficient international environmental agreements.