Toward Farsightedly Stable International Environmental Agreements, Part two

We investigate the stability of International Environmental Agreements (IEA) by applying game theory. The paper extends further our previous research on farsightedly stable coalitions and preferred farsightedly stable coalitions (Osmani & Tol 2007). The integrated assessment model FUND provides the cost-bene¯t payo® functions of pollution abatement for sixteen di®erent world regions. The stability concept of d'Aspremont et al. (1983) and farsighted stability of Chwe (1994) are compared. The d'Aspremont stability assumes that players are myopic while the farsighted stability concept captures the perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable and D'Aspremont stable coalitions are found and their improvement to environment and welfare are computed.

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