Minimum Participation Rules with Heterogeneous Countries

Springer Science and Business Media LLC - Tập 62 - Trang 711-727 - 2014
Hans-Peter Weikard1, Leo Wangler2, Andreas Freytag3,4
1Department of Social Sciences, Wageningen School of Social Sciences, Wageningen University, Wageningen, The Netherlands
2Institut für Innovation und Technik (iit), Berlin, Germany
3Department of Economics, Friedrich Schiller University Jena, Jena, Germany
4Department of Economics, Stellenbosch University, Stellenbosch, South Africa

Tóm tắt

Almost all international environmental agreements include a minimum participation rule. Under such rule an agreement becomes legally binding if and only if a certain threshold in terms of membership or contribution is reached. We analyse a cartel game with open membership and heterogeneous countries to study the endogenous choice of a minimum participation rule and its role for the success of international environmental agreements. While a full participation requirement would be efficient, we find (sequential) equilibria with a minimum participation rule that allows at least one country to free ride. Free riding may occur if a country can exploit some bargaining power in the negotiation of the minimum participation rule.

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