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DOI 10.1023/A:1014916012640
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Title (Primary) Introducing "Cooperative push": How inefficient environmental policy (sometimes!) protects the global commons better
Author Endres, A.; Ohl, C.
Source Titel Public Choice
Year 2002
Department OEKON
Volume 111
Issue 3-4
Page From 285
Page To 302
Language englisch
Abstract In this paper we argue that the incentive structures of the games nations play in international environmental negotiations depend upon the choice of environmental policy instruments. Bargaining on the use of some instrument (e.g. an effluent charge) may put the players into a dilemma game (like Chicken). Negotiations to apply a different instrument (say, an emission reduction quota) may lead to a cooperation game (like Stag Hunt). The higher the incentive to cooperate in the type of game which is built up by a specific instrument, the higher is this instrument's ``cooperative push''. Of course, comparing two instruments, the one with the higher cooperative push might well be the less efficient one. In this Paper, we analyse a situation where the higher cooperative push of an instrument overcompensates this instrument's lower efficiency: Aggregate welfare with bilateral cooperation (the equilibrium of Stag Hunt) is higher than with unilateral cooperation (the equilibrium of the Chicken game). The question remains whether sovereign countries decide to play Stag Hunt ending up in the welfare superior equilibrium. It is shown below that they do not in an uncoordinated optimising setting. However, we develop a particular frame where the proposed solution meets the criteria of individual rationality, stability and fairness. It thereby establishes the politically most desired result - international cooperation.
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Endres, A., Ohl, C. (2002):
Introducing "Cooperative push": How inefficient environmental policy (sometimes!) protects the global commons better
Public Choice 111 (3-4), 285 - 302 10.1023/A:1014916012640