A bargaining game analysis of international climate negotiations

Smead, Rory; Sandler, Ronald; Forber, Patrick; Basl, John

doi:10.1038/nclimate2229

Cited by 62 publications

(37 citation statements)

References 25 publications

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“…Climate negotiation and coalition formation is an interesting new field of study for which ABMs are especially well suited [77][78][79]. Realistic ABMs that take different perspectives into account produce very different result than equilibrium-based models with rational actors [80] and the way the negotiations are structured have a large impact on the results [81,82].…”

Section: Specific Problems With Energy Modelsmentioning

confidence: 99%

Creating Agent-Based Energy Transition Management Models That Can Uncover Profitable Pathways to Climate Change Mitigation

Hoekstra

Steinbuch

Verbong³

2017

Complexity

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The energy domain is still dominated by equilibrium models that underestimate both the dangers and opportunities related to climate change. In reality, climate and energy systems contain tipping points, feedback loops, and exponential developments. This paper describes how to create realistic energy transition management models: quantitative models that can discover profitable pathways from fossil fuels to renewable energy. We review the literature regarding agent-based economics, disruptive innovation, and transition management and determine the following requirements. Actors must be detailed, heterogeneous, interacting, learning, and strategizing. Technology should be represented as a detailed and heterogeneous portfolio that can develop in a bottom-up manner, using endogenous feedback loops. Assumptions about discount rates and the social cost of carbon should be configurable. The model should contain interactions between the global, national, local, and individual level. A review of modelling techniques shows that equilibrium models are unsuitable and that system dynamics and discrete event simulation are too limited. The agent-based approach is found to be uniquely suited for the complex adaptive sociotechnical systems that must be modelled. But the choice for agent-based models does not mean a rejection of other approaches because they can be accommodated within the agent-based framework. We conclude with practical guidelines.

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Section: Specific Problems With Energy Modelsmentioning

confidence: 99%

Creating Agent-Based Energy Transition Management Models That Can Uncover Profitable Pathways to Climate Change Mitigation

Hoekstra

Steinbuch

Verbong³

2017

Complexity

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“…For example, some authors have recently shown that international negotiations over greenhouse gas emissions alternatively can be modelled more as a so-called 'bargaining game,' and when modelled as such, the game actually has some solutions (e.g., Finus, 2008;DeCanio and Fremstad, 2013;Smead et al, 2014). As another example, there is a branch of game theory known as 'cooperative game theory,' that has received only a fraction of the attention of its non-cooperative counterpart when it comes to climate change (e.g., Diamantoudi and Sartzetakis, 2006;Diamantoudi and Sartzetakis, 2014).…”

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confidence: 99%

Game Theory and the Self-Fulfilling Climate Tragedy

Kopec¹

2017

Environmental Values

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Abstract:Game theorists tend to model climate negotiations as a so-called 'tragedy of the commons'. This is rather worrisome, since the conditions under which such commons problems have historically been solved are almost entirely absent in the case of international greenhouse gas emissions. In this paper, I will argue that the predictive accuracy of the tragedy model might not stem from the model's inherent match with reality but rather from the model's ability to make self-fulfilling predictions. I then sketch some possible ways to dispel the tragedy, including (1) recognising some ways the assumptions of the model fail, (2) taking seriously recent work suggesting that increasing greenhouse gas emissions is not in most nations' own self-interest, and (3) preferring alternative models like collective risk dilemmas, bargaining games, or cooperative models.

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“…In addition to the experimental methodology employed, we depart from (Smead et al, 2014) in two noteworthy ways. First, in our design, the loss incurred by a group that fails to reach agreement is independent of individual demands.…”

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confidence: 99%

“…Smead and coauthors (Smead et al, 2014) use an agent-based model with learning dynamics to examine past failures and future prospects for an international climate agreement. In the model, agents play an N-player Nash bargaining game (Nash, 1950;Kalai and Smorodinsky, 1975;Muthoo, 1999), where each player's strategy set is the interval (0,1) representing the range of possible reductions: 1 constituting business-as-usual (BAU) and 0 constituting a complete reduction to zero emissions.…”

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confidence: 99%

“…In the meantime, one may approach the issue with other tools, such as theoretical modeling and laboratory experimentation. Inspired by a bargaining model that aims to capture some of the stylized tradeoffs inherent in climate change negotiations (Smead et al, 2014), we introduce a novel economic experiment that focuses on the role of side deals reached by a subset of negotiators in shaping subsequent global negotiations.…”

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confidence: 99%

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