International Environmental Agreements with mixed strategies and investment
Document Type
Journal article
Source Publication
Journal of Public Economics
Publication Date
10-2012
Volume
96
Issue
9-10
First Page
685
Last Page
697
Publisher
Elsevier BV
Keywords
International Environmental Agreement, Climate agreement Participation game, Investment, Mixed strategy
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.
DOI
10.1016/j.jpubeco.2012.05.003
Print ISSN
00472727
Publisher Statement
Copyright © 2012 Elsevier B.V. All rights reserved.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Hong, F., & Karp, L. (2014). International Environmental Agreements with mixed strategies and investment. Journal of Public Economics, 96(9-10), 685-697. doi: 10.1016/j.jpubeco.2012.05.003