Alexandria Digital Research Library

Three Essays on International Environmental Agreements : Extensions to Cooperative R and D, Learning, and Social Preferences

Author:
Mohr, Ross Andrew
Degree Grantor:
University of California, Santa Barbara. Department of Economics
Degree Supervisor:
Charles D. Kolstad
Place of Publication:
[Santa Barbara, Calif.]
Publisher:
University of California, Santa Barbara
Creation Date:
2014
Issued Date:
2014
Topics:
Economics, Environmental and Economics, Theory
Keywords:
Cooperation
Uncertainty
Social preferences
Game theory
International environmental agreements
Genres:
Online resources and Dissertations, Academic
Dissertation:
Ph.D.--University of California, Santa Barbara, 2014
Description:

This dissertation considers the theoretical aspects of countries' incentives to cooperate on environmental good provision and resolve free-rider incentives, in particular with the formation of an International Environmental Agreement (IEA).

Following a short chapter reviewing the weakly renegotiation-proof equilibrium, the third chapter, "Sustaining Full Cooperation in an International Environmental Agreement through Learning and R&D", analyzes the effects of learning and R&D on an IEA by assuming that countries are uncertain regarding the benefits of pollution abatement. This paper shows that uncertainty improves the likelihood of obtaining a Pareto-optimal IEA, which is constructed as a weakly renegotiation-proof equilibrium in an infinitely repeated game, by allowing for a wider range of discount factors to sustain cooperation than in the no uncertainty case. Finally, this paper analyzes whether or not new knowledge gained through R&D is beneficial for sustaining cooperation and finds that achieving the Pareto-optimal IEA tends to be less likely if R&D reduces uncertainty. The mechanism driving these results is that uncertainty leads to a higher expected net loss from punishment to a defecting country, which implies that deviations are better deterred under uncertainty than with no uncertainty.

In the fourth chapter, titled "Renegotiation-Proof International Environmental Agreements with Social Preferences", I turn from purely self-interested agents and examine how social preferences, in particular, preferences for equity and efficiency, affect the likelihood of cooperation among countries to abate pollution when compared to the case of agents that are only self-interested. It is shown that an IEA with any level of cooperation, including full cooperation, exists as a weakly renegotiation-proof equilibrium for high enough discount factors. As social preferences grow stronger, the range of discount factors that can support cooperation increases, which implies that cooperation is more likely under social preferences. The key effect driving this result is that social preferences cause the net loss from the punishment of a defecting country to increase, which better deters deviations from cooperation.

Physical Description:
1 online resource (123 pages)
Format:
Text
Collection(s):
UCSB electronic theses and dissertations
ARK:
ark:/48907/f3nv9gdw
ISBN:
9781321568288
Catalog System Number:
990045118650203776
Rights:
Inc.icon only.dark In Copyright
Copyright Holder:
Ross Mohr
File Description
Access: Public access
Mohr_ucsb_0035D_12338.pdf pdf (Portable Document Format)