Climate Coalitions: A Theoretical and Computational Appraisal

Using an updated version of the CWS model (introduced by Eyckmans and Tulkens in Resource and Energy Economics 2003), this paper intends to evaluate with numbers the respective merits of two competing notions of coalition stability in the standard global public goods model as customarily applied to the climate change problem. After a reminder of the model structure and of the definition of the two game theoretical stability notions involved – namely, core stability and internal-external stability, the former property is shown to hold for the grand coalition in the CWS model only if resource transfers of a specific form between countries are introduced. It is further shown that while the latter property holds neither for the grand coalition nor for most large coalitions, it is nevertheless verified in a weak sense that involves transfers (dubbed “potential internal stability”) for most small coalitions. The reason for this difference is brought to light, namely the differing rationale that inspires the transfers in either case. Finally, it is shown that the stable coalitions that perform best (in terms of carbon concentration and global welfare) are always composed of both industrialized and developing countries. Two sensitivity analyses confirm the robustness of all these results.Climate Change, Coalitions, Simulation, Integrated Assessment

Game theory

game theory

The Impact of Surplus Sharing on The Stability of International Climate Agreements

This paper analyses stability of coalitions for greenhouse gas abatement for different sharing rules applied to the gains from co-operation. We use a 12-regions model designed to examine internal and external stability of coalitions (STACO). We compare different sharing rules like, for example, grandfathering (i.e. sharing proportional to emissions) and a number of so-called equitable rules like, for example, sharing proportional to population or according to historical responsibilities. Due to strong free-rider incentives we find only small stable coalitions for all sharing rules examined. As a general pattern we observe that coalitions consist of regions with low marginal abatement costs, which are attractive partners in any coalition, and regions which have the highest claims according to the respective sharing rule. Furthermore, we find that a grandfathering scheme leads to the largest and – in terms of greenhouse gas abatement – most successful coalition, while many of the equitable rules achieve very little.International environmental agreements, Sharing rules, Stability of coalitions

Forming Stable Coalitions: The Process Matters

Players are assumed to rank each other as coalition partners. Two processes of coalition formation are defined and illustrated: i) Fallback (FB): Players seek coalition partners by descending lower and lower in their preference rankings until some majority coalition, all of whose members consider each other mutually acceptable, forms. ii) Build-up (BU):Same descent as FB, except only majorities whose members rank each other highest form coalitions. BU coalitions are stable in the sense that no member would prefer to be in another coalition, whereas FB coalitions, whose members need not rank each other highest, may not be stable. BU coalitions are bimodally distributed in a random society, with peaks around simple majority and unanimity the distributions of majorities in the US Supreme Count and in the US House of Representatives follow this pattern. The dynamics of real-life coalition-formation processes are illustrated by two Supreme Court cases.Coalition dynamics, Fallback bargaining, Manipulability, Legislatures, US Supreme Court

New Roads to International Environmental Agreements: The Case of Global Warming

We analyze with an integrated assessment model of climate change the formation of interna-tional environmental agreements (IEAs) by applying the widely used concept of inter-nal & external stability and several modifications of it. We relax the assumptions of a single agreement and open membership rule. It turns out that regional agreements are superior to a single agreement and exclusive is superior to open membership in welfare and ecological terms. Moreover, we show the importance of transfers for successful treaty-making. We relate our results to the design of current and past IEAs as well as to other issues of international policy coordination.Design of climate treaty protocol, Coalition formation, Non-cooperative game theory

Efficient coalition formation and stable coalition structures in a supply chain environment

We study a real supply chain environment from which specific information and knowledge can be extrapolated for other similar environments. We focus our research on the analysis of the interactions between members forming different teams (and between the teams themselves), and on the leader’s management of the supply chain. We note that there are many elements that contribute to the profitability of the network, which is dependent on the actions of the actors involved. We analyze certain characteristics that the actors have, such as their behavior, adaptation and learning levels, effort and willingness. Based on these components, we examine the performance of our actors and of the teams that the actors form. We provide specific calculations that take into account most of the components determining the added value to the system. One of the advantages of our main formula is that it can be used to monitor the progress of the actors, as well as it can help in the identification of problematic aspects impeding in the creation of value for the system. Our formula is very flexible and a modeler is able to adapt it to similar environments, providing him with great insight in the structures that he investigates. We study certain theoretical games from which we uncover certain information and characteristics of similar environments and settings. Moreover, we provide a real life example in order to truly understand the mechanism of the network, and validate our theoretical assessments. Moreover, we provide certain recommendations for a leader that is responsible for the supervision of actors (which have specific responsibilities) and the administration of a supply chain environment.coalition, supply chain management, core, value of the game, Coalition Factor Estimation

Endogenous Minimum Participation in International Environmental Treaties

Many international treaties come into force only after a minimum number of countries have signed and ratified the treaty. Why do countries agree to introduce a minimum participation constraint among the rules characterising an international treaty? This question is particularly relevant in the case of environmental treaties dealing with global commons, where free-riding incentives are strong. Is a minimum participation rule a way to offset these free-riding incentives? Why do countries that know they have an incentive to free-ride accept to “tie their hands” through the introduction of a minimum participation constraint? This paper addresses the above questions by analysing a three-stage non-cooperative coalition formation game. In the first stage, countries set the minimum coalition size that is necessary for the treaty to come into force. In the second stage, countries decide whether to sign the treaty. In the third stage, the equilibrium values of the decision variables are set. At the equilibrium, both the minimum participation constraint and the number of signatories – the coalition size – are determined. This paper shows that a non-trivial partial coalition, sustained by a binding minimum participation constraint, forms at the equilibrium. This paper thus explains why in international negotiations all countries often agree on a minimum participation rule even when some of them do not intend to sign the treaty. The paper also analyses the optimal size of the minimum participation constraint.Agreements, Climate, Negotiations, Policy, Incentives

Distributed Cooperative Sensing in Cognitive Radio Networks: An Overlapping Coalition Formation Approach

Cooperative spectrum sensing has been shown to yield a significant performance improvement in cognitive radio networks. In this paper, we consider distributed cooperative sensing (DCS) in which secondary users (SUs) exchange data with one another instead of reporting to a common fusion center. In most existing DCS algorithms, the SUs are grouped into disjoint cooperative groups or coalitions, and within each coalition the local sensing data is exchanged. However, these schemes do not account for the possibility that an SU can be involved in multiple cooperative coalitions thus forming overlapping coalitions. Here, we address this problem using novel techniques from a class of cooperative games, known as overlapping coalition formation games, and based on the game model, we propose a distributed DCS algorithm in which the SUs self-organize into a desirable network structure with overlapping coalitions. Simulation results show that the proposed overlapping algorithm yields significant performance improvements, decreasing the total error probability up to 25% in the Q_m+Q_f criterion, the missed detection probability up to 20% in the Q_m/Q_f criterion, the overhead up to 80%, and the total report number up to 10%, compared with the state-of-the-art non-overlapping algorithm

Conservation and Optimal Use of Rangelands

In previous papers we have considered the optimal mix of biodiversity in semi-arid rangelands, focusing on the steady state. This paper addresses the question of conservation in the optimal use of rangelands. That is, it considers the optimal trajectory of biodiversity change. There are two issues involved in the question of timing. One is the uncertainty associated with the fact that many changes in the flora and fauna of rangelands are 'event-driven'. They depend on stochastic parameters taking particular values before a change of state can occur. A second issue relates to the lag structure of changes. In a system that involves a mix of fast and slow variables, in which the approach to the optimum is not 'most rapid', the optimal trajectory may require the system to remain in an apparently stable intermediate equilibrium for some time before it converges to the optimum state. The paper discusses the role of conservation in the optimal use of rangeland resources.Biodiversity, Rangelands