Bargaining over a climate deal: deadline and delay

Tazdaït, Tarik

doi:10.1007/s10479-011-1018-9

Cited by 25 publications

(2 citation statements)

References 23 publications

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“…A delay of reaching an agreement is costly (Rubinstein 1982;Muthoo 1999). This is particularly relevant for climate agreements: the sooner cooperation is achieved, the smaller the climate damages will be (Courtois and Tazdaït 2014). Binmore et al (1986) show that in a bargaining game players' time preferences impact their strategic choices and thus the bargaining solution.…”

Section: Bargaining Weights Based On Discount Factormentioning

confidence: 99%

Nash bargaining solutions for international climate agreements under different sets of bargaining weights

Shu-min

Ierland

Weikard

et al. 2017

Int Environ Agreements

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Bargaining is a tool to share collaborative gains and to facilitate reaching agreement. To improve incentives to join an international climate agreement (ICA), the Nash bargaining solution can be used to distribute cooperative gains across signatories. In this paper, we examine how the formation of ICAs and their mitigation efficiency are impacted by the use of the Nash bargaining solution. In a Nash bargaining game with heterogeneous players, bargaining powers are unequal and may be driven by different characteristics of the players. We employ different sets of asymmetric bargaining weights in order to examine the effectiveness of climate coalitions that emerge as stable agreements. Using the Nash bargaining solution, we obtain results from the stability of coalition model (STACO). We find that the Nash bargaining solution can improve the participation incentives and performances of ICAs as compared to agreements that do not redistribute gains from cooperation, but its capacity to overcome free-riding incentives is limited. However, if Nash bargaining accounts for outside options of players, we find larger stable coalitions and higher global abatement levels. In fact, Nash bargaining with outside options can stabilise the largest coalitions that can possibly be stable in our game.

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Section: Bargaining Weights Based On Discount Factormentioning

confidence: 99%

Nash bargaining solutions for international climate agreements under different sets of bargaining weights

Shu-min

Ierland

Weikard

et al. 2017

Int Environ Agreements

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“…However, to take account of the dynamic process of bargaining, negotiations can be modelled by non-cooperative bargaining games. Work on environmental problems includes, among others, Chen (1997); Compte and Jéhiel (1997); Caparros et al (2004); Courtois and Tazdait (2014). Maler (1989) is the first paper to show the inefficiency of uniform abatement standards in IEAs.…”

Section: Introductionmentioning

confidence: 99%

International Environmental Agreements: The Case of Costly Monetary Transfers

Bayramoglu

Jacques

2014

Environ Resource Econ

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Most existing international environmental agreements to resolve transboundary pollution problems appear constrained in the sense that either monetary transfers accompany uniform abatement standards (agreements based on a uniform standard with monetary transfers), or differentiated abatement standards are established, but without monetary transfers (agreements based on differentiated standards). For two asymmetric countries facing the challenge of a transboundary pollution problem, we compare the relative efficiency of these two second-best agreements. We study especially the role of the costs associated with transfer payments across countries in the choice of these agreements. To conduct this analysis, we use a negotiation game and the generalized Nash bargaining solution (Nash in Econometrica 21:128-140, 1953) as the equilibrium. For total welfare, our findings show that countries collectively prefer the uniform to the differentiated agreement if the cost of transfers is sufficiently low compared to the ratio for countries of the difference of the abatement costs between the two agreements. In the analysis of individual welfare, we also discuss the reluctance of one country to sign a specific type of agreement even if it is better off than in the case of non-cooperation.We are grateful to Bernard Caillaud for the motivation of the paper, and to Ivar Ekeland for his invitation to the University British Columbia (UBC) where the research has been started. We would like to thank Brian Copeland, Philippe Bernard, Françoise Forges and two referees for their constructive remarks. We would also like to thank the participants of the EURiSCO seminar at

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