Open AccessTHE SIZE OF FARSIGHTED STABLE COALITIONS IN A GAME OF POLLUTION ABATEMENT
Author(s) -
BIANCARDI MARTA,
DI LIDDO ANDREA
Publication year - 2010
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/j.1939-7445.2010.00070.x
Subject(s) - pollution , economics , mathematical economics , natural resource economics , microeconomics , ecology , biology
The game theoretical analysis of international environmental problems has received increasing attention in recent years. Major issues are as follows. Under which conditions will an international environmental agreement (IEA) be signed? Will the agreement be stable? Game theory has given different answers to these questions; in particular, it is possible to show that if countries are myopic then only small stable coalitions occur, but if they are farsighted then both large and small stable coalitions exist. This paper studies the size of a farsighted stable IEA by considering a quadratic cost function in a pollution abatement model. Following Rubio and Ulph [2006], we consider both the case of non‐negative emissions as well as the case of unrestricted ones.