Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268491 
Year of Publication: 
2023
Series/Report no.: 
Ruhr Economic Papers No. 990
Publisher: 
RWI - Leibniz-Institut für Wirtschaftsforschung, Essen
Abstract: 
Public good games in coalitional form, such as the ones depicting international environmental agreements for the reduction of a global pollutant, generally foresee scarce levels of cooperation. The incentive to free ride, that increases for higher levels of cooperation, prevents the formation of stable coalitions. The introduction of other-regarding preferences, in the form of Fehr and Schmidt utility functions, enlarges cooperation, but still at suboptimal levels. The present paper considers a further possibility, namely the introduction of a mechanism through which the contributions of players to the public good are proportional to the average contribution of the other players abiding to the mechanism: proportional contributions. The mechanism is therefore rooted into reciprocity. By applying it to a standard abatement game parameterized on the RICE model, we show that the mechanism is in fact able to increase cooperation both under standard and under F&S preferences. Stability of the grand coalition is never reached, but potential internally stable grand coalitions are achieved under F&S preferences. The attainment of higher cooperation comes at the expense of the level of global abatement that is lower when proportional contributions are in place.
Abstract (Translated): 
Im vorliegenden Papier wird ein reziprozitätsbasierter Beitragsmechanismus in ein Koalitionsspiel zur Bereitstellung eines globalen öffentlichen Gutes - z.B. Klimaschutz - eingeführt. Spieler tragen - wenn sie einer Koalition beitreten - proportional zum durchschnittlichen Beitrag bei. Das Modell wird anhand des RICE-Modells kalibriert. Es zeigt sich, dass der vorgeschlagene Mechanismus tatsächlich die Partizipation an Klimakoalitionen steigern kann, sowohl unter Annahme von Standard-, als auch von Fehr-Schmidt Präferenzen. Jedoch wird unter dem Mechanismus weniger des öffentlichen Gutes bereitgestellt.
Subjects: 
Coalitional game
cooperation
F&S preferences
public good
reciprocity
JEL: 
C72
D63
H41
Q54
Persistent Identifier of the first edition: 
ISBN: 
978-3-96973-156-7
Document Type: 
Working Paper

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