Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121345
Authors: 
Günther, Michael
Hellmann, Tim
Year of Publication: 
2015
Series/Report no.: 
Working Papers, Center for Mathematical Economics 545
Abstract: 
Increasing concerns about climate change have given rise to the formation of International Environmental Agreements (IEAs) as a possible solution to limit global pollution effects. In this paper, we study the stability of IEAs in a repeated game framework where we restrict to strategies which are simple and invariant to renegotiation. Our main contribution to the literature on IEAs is that we allow for heterogeneous patterns of pollution such that additional to a global effect of pollution there are local pollution effects represented by a network structure. We show that stable IEAs exist if the network structure is balanced. Too large asymmetries in the degree of local spillovers may however lead to non-existence of stable structures. The generality of our approach allows for several applications to general problems in the provision of public goods.
Subjects: 
Coalition structures
Networks
International environmental agreements
Weak renegotiation-proofness
JEL: 
C72
C73
D85
F53
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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