International Environmental Agreements with mixed strategies and investment

• 成果类型: Article
• 署名作者: Hong, Fuhai; Karp, Larry
• 署名单位: University of California System; University of California Berkeley; Shanghai University of Finance & Economics
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2012.05.003
• 发表日期: 2012
• 页码: 685-697
• 关键词: International Environmental Agreement; Climate agreement; Participation game; INVESTMENT; mixed strategy

摘要

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. (C) 2012 Elsevier B.V. All rights reserved.