Toward a positive theory of coalition formation and endogenous instrumental choice in global pollution control

Michael Finus, Bianca Rundshagen

Research output: Contribution to journalArticle

37 Citations (Scopus)

Abstract

The paper analyzes the coalition formation process in a global emission game with asymmetric countries where the number of signatories, the abatement target and the policy instrument are chosen simultaneously. Exemplarily, a uniform emission reduction quota and an effluent charge are considered. Stability is analyzed in a supergame framework by applying the concept of coalition-proofness. The analysis also considers the impact of impatient agents, restricted and simple punishment profiles. Two main results may be mentioned: First, paradoxically, IEAs achieve only little (if signed at all) if the externality problem is distinct. Second, the authors' model helps to explain the frequent appearance of emission quotas in international pollution control despite the recommendations by economists to use market-based instruments like effluent charges.
Original languageEnglish
Pages (from-to)145-186
Number of pages42
JournalPublic Choice
Volume96
Issue number1-2
DOIs
Publication statusPublished - 1998

Fingerprint

coalition formation
economist
coalition
penalty
market
Coalition formation
Effluent
Global pollution
Charge
Pollution control
Emission reduction
Supergame
Economists
Punishment
Coalition-proofness
Policy instruments
Abatement
Externalities
Market-based instruments

Keywords

  • demand and supply (the Commons) (Q210)
  • Committees
  • Social Choice
  • Renewable resources and conservation
  • Clubs
  • Associations (D710)

Cite this

Toward a positive theory of coalition formation and endogenous instrumental choice in global pollution control. / Finus, Michael; Rundshagen, Bianca.

In: Public Choice, Vol. 96, No. 1-2, 1998, p. 145-186.

Research output: Contribution to journalArticle

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