Strategic Behavior and the Environment > Vol 5 > Issue 3–4

Overlapping International Environmental Agreements

Emilson Caputo Delfino Silva, Department of Marketing, Business, Economics & Law, University of Alberta, Canada, emilson@ualberta.ca Xie Zhu, Department of Economics, Oakland University, USA, zhu@oakland.edu
 
Suggested Citation
Emilson Caputo Delfino Silva and Xie Zhu (2015), "Overlapping International Environmental Agreements", Strategic Behavior and the Environment: Vol. 5: No. 3–4, pp 255-299. http://dx.doi.org/10.1561/102.00000063

Published: 22 Dec 2015
© 2015 E. C. D. Silva and X. Zhu
 
Subjects
Collective action,  Climate Change
 
Keywords
C72D62D78H41H77
Perfectly coalition-proof equilibriumOverlapping coalitionsClimate changeCorrelated pollutantsInternational environmental agreements
 

Article Help

Share

Download article
In this article:
1. Introduction
2. Extension of Coalition-Proof Nash Equilibrium
3. International Environmental Agreements for Correlated Pollutants
4. Relevant International Environmental Agreements (IEAs)
5. Perfectly Coalition-Proof Nash Equilibrium
6. Coalition Operation Costs: Dominant Fully Overlapped Structures
7. Larger Economy and Acid-Rain Adaptation R&D
8. Conclusion
Appendix
References

Abstract

The perfectly coalition-proof Nash equilibrium (PCPN) concept is extended to allow for the emergence of overlapping coalitions in equilibrium. We study the efficiency and stability properties of environmental agreements to control emissions of correlated continental and global pollutants. We show that set of PCPN equilibria includes perfectly strong Nash (PSN) equilibria if the national damage from continental pollution is sufficiently large relative to the national damage from global pollution. We also show that: (i) continental agreements may be perfectly coalition-proof under much less restrictive circumstances; (ii) perfect Nash equilibria for fully overlapped agreements may be superior to the Grand Coalition's optimal allocation in the presence of coalitional operation costs; and (iii) PSN equilibria may still emerge in a larger world if coalition formation yields R&D spillover benefits.

DOI:10.1561/102.00000063