The efficacy of international environmental agreements when adaptation matters: Nash-Cournot vs Stackelberg leadership

A-Tier
Journal: Journal of Environmental Economics and Management
Year: 2021
Volume: 109
Issue: C

Authors (3)

Finus, Michael (Karl-Franzens-Universität Graz) Furini, Francesco (not in RePEc) Rohrer, Anna Viktoria (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze the paradox of cooperation, as established by Barrett (1994), and later reiterated by many others, in a more general framework. That is, we show that stable coalitions are either small or if they are large, the potential gains from cooperation are small. First, we argue that the extension to a mitigation-adaptation game is a generalization of Barrett's pure mitigation game. Second, we consider for this extension not only the Nash-Cournot scenario, as in Bayramoglu et al. (2018), but also the Stackelberg scenario. Third, we show generally that if mitigation levels in different countries are strategic substitutes, stable coalitions are larger in the Stackelberg than in the Nash-Cournot scenario. Fourth, this is reversed if mitigation levels are strategic complements, which is possible if the strategic interaction between mitigation and adaptation is sufficiently strong. Fifth, for all possible combination of assumptions, we demonstrate that the paradox of cooperation is robust, except if mitigation and adaptation were strategic complements, which we argue is an assumption not supported by empirical evidence.

Technical Details

RePEc Handle
repec:eee:jeeman:v:109:y:2021:i:c:s0095069621000449
Journal Field
Environment
Author Count
3
Added to Database
2026-01-25