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Modesty May Pay !
Author(s) -
FINUS MICHAEL,
MAUS STEFAN
Publication year - 2008
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/j.1467-9779.2008.00387.x
Subject(s) - stylized fact , negotiation , economics , pessimism , extension (predicate logic) , microeconomics , macroeconomics , computer science , law , political science , philosophy , epistemology , programming language
Most noncooperative game theoretic models of international environmental agreements (IEAs) draw a pessimistic picture of the prospective of successful cooperation. In this paper, we consider the possibility that countries agree on modest instead of ambitious abatement targets. It is shown that this can be an explanation for higher participation and more successful treaties. Thus, modesty may well pay, though the first‐best optimum cannot be achieved. It is also demonstrated that our model extension makes it easier to relate the stylized model to actual negotiations.