Potentially Harmful International Cooperation on Global Public Good Provision

Wolfgang Buchholz, Richard Cornes, Dirk Rübbelke

    Research output: Contribution to journalArticlepeer-review

    21 Citations (Scopus)

    Abstract

    Experience from climate policy suggests that full cooperation among all countries is not a likely outcome. In this paper we therefore consider the case where only members of a subgroup of countries cooperate by reciprocally matching their public good contributions. In a two-stage game, matching rates are set at stage 1 then national contributions are chosen at stage 2. In the case of small coalitions, negative matching may result in the subgame-perfect equilibrium that decreases global public good provision and outsiders' welfare. Moreover, a growing number of countries may paradoxically entail a reduction of equilibrium public good supply.

    Original languageEnglish
    Pages (from-to)205-223
    Number of pages19
    JournalEconomica
    Volume81
    Issue number322
    DOIs
    Publication statusPublished - Apr 2014

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