Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges
Michael Finus, Department of Economics, University of Stirling, UK, Michael.Finus@stir.ac.uk
Michael Finus (2008), "Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges", International Review of Environmental and Resource Economics: Vol. 2: No. 1, pp 29-67. http://dx.doi.org/10.1561/101.00000011
In recent years, the number of publications that analyze the formation and stability of international environmental agreements (IEAs) using the method of game theory has sharply increased. This paper reports on some recent results that shall demonstrate the usefulness but also the limitation of game theory for the analysis of IEAs. It restricts attention to the class of non-cooperative membership models and focuses on the relation between different designs and the success of IEAs. Results are illustrated for the climate change problem with the empirical Stability of Coalitions (STACO) model developed by Dellink et al. (2004). Subsequently, some features of actual treaty-making not considered with this model are discussed with reference to the literature and their importance for future research is highlighted.