International Environmental Agreements with mixed strategies and investment

Fuhai HONG; Larry KARP

doi:10.1016/j.jpubeco.2012.05.003

International Environmental Agreements with mixed strategies and investment

Fuhai HONG, Larry KARP

Research output: Journal Publications › Journal Article (refereed) › peer-review

27 Citations (Scopus)

Abstract

We modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result: with mixed strategies, equilibrium participation and welfare are higher in equilibria that involve higher investment.

Original language	English
Pages (from-to)	685-697
Number of pages	13
Journal	Journal of Public Economics
Volume	96
Issue number	9-10
DOIs	https://doi.org/10.1016/j.jpubeco.2012.05.003
Publication status	Published - 1 Oct 2012
Externally published	Yes

Keywords

Climate agreement Participation game
International Environmental Agreement
Investment
Mixed strategy

Access to Document

10.1016/j.jpubeco.2012.05.003

Cite this

@article{bf239b8cc16e4aa9bd0846691200a127,

title = "International Environmental Agreements with mixed strategies and investment",

abstract = "We modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result: with mixed strategies, equilibrium participation and welfare are higher in equilibria that involve higher investment.",

keywords = "Climate agreement Participation game, International Environmental Agreement, Investment, Mixed strategy",

author = "Fuhai HONG and Larry KARP",

year = "2012",

month = oct,

day = "1",

doi = "10.1016/j.jpubeco.2012.05.003",

language = "English",

volume = "96",

pages = "685--697",

journal = "Journal of Public Economics",

issn = "0047-2727",

publisher = "Elsevier",

number = "9-10",

}

TY - JOUR

T1 - International Environmental Agreements with mixed strategies and investment

AU - HONG, Fuhai

AU - KARP, Larry

PY - 2012/10/1

Y1 - 2012/10/1

N2 - We modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result: with mixed strategies, equilibrium participation and welfare are higher in equilibria that involve higher investment.

AB - We modify a canonical participation game used to study International Environmental Agreements (IEA), considering both mixed and pure strategies at the participation stage, and including a prior cost-reducing investment stage. The use of mixed strategies at the participation stage reverses a familiar result and also reverses the policy implication of that result: with mixed strategies, equilibrium participation and welfare are higher in equilibria that involve higher investment.

KW - Climate agreement Participation game

KW - International Environmental Agreement

KW - Investment

KW - Mixed strategy

UR - http://commons.ln.edu.hk/sw_master/5949

UR - http://www.scopus.com/inward/record.url?scp=84862245182&partnerID=8YFLogxK

U2 - 10.1016/j.jpubeco.2012.05.003

DO - 10.1016/j.jpubeco.2012.05.003

M3 - Journal Article (refereed)

SN - 0047-2727

VL - 96

SP - 685

EP - 697

JO - Journal of Public Economics

JF - Journal of Public Economics

IS - 9-10

ER -

International Environmental Agreements with mixed strategies and investment

Abstract

Keywords

Access to Document

Other files and links

Fingerprint

Cite this