A short note on joint welfare maximization assumptions

Non-cooperative game theoretical models of international environmental agreements (IEAs) use the assumption that coalition of signatories maximize their joint welfare. The joint maxi- mization assumption is compared with di®erent sharing pro¯t schemes such as Shapley value, Nash bargaining solution and Consensus Value. The results show that the joint welfare max- imization assumption is similar with Nash Bargaining solution.game theory, coalition formation, joint welfare maximization, Shapley value, Nash bargaining solution, Consensus Value, international environmental agreements

Controlling industrial pollution : a new paradigm

The authors call for a revised model for the regulation of industrial pollution. They think the traditional emphasis on appropriate instruments, while ultimately correct, is premature, because agencies in most developing countries have insufficient information and burdensome transaction costs to implement any instruments comprehensively. Once regulators have better information, more integrated information systems, more capacity for setting priorities, and a stronger public mandate, it will not be difficult for them to manage pollution more cost-effectively. Overhasty production of market-based instruments will not work and will probably discredit those regulatory tools. Rather, the new model of regulation should relegate regulators to their proper place in the scheme of things. The state should play a role in regulating pollution externalities, but should also recognize the role of the community and the market. In the authors'view, appropriate regulation in developing countries should incorporate five key features, namely, it should foster a climate of information intensity, encourage community environmental education, allow variations in regulations in different communities, initiate pilot projects and build larger programs later, and fashion adaptive regulatory instruments that both counter environmental degradation and minimize disruption for investors.Health Monitoring&Evaluation,Environmental Economics&Policies,Water and Industry,Public Health Promotion,Decentralization,ICT Policy and Strategies,Urban Services to the Poor,Environmental Economics&Policies,Water and Industry,Health Monitoring&Evaluation

Information, strategic behavior and fairness in ultimatum bargaining: An experimental study

Game Theory;Bargaining;Information

Dynamic Controllability with Overlapping targets: A Generalization of the Tinbergen-Nash Theory of Economic Policy

We generalize some recent results developed in static policy games with multiple players, to a dynamic context. We find that the classical theory of economic policy can be usefully applied to a strategic context of difference games: if one player satisfies the Golden Rule, then either all other players’ policies are ineffective with respect to the dynamic target variables shared with that player; or no Nash Feedback Equilibrium can exist, unless they all share target values for those variables. We extend those results to the case where there are also non-dynamic targets, to show that policy effectiveness (a Nash equilibrium) can continue to exist if some players satisfy the Golden Rule but target values differ between players in the non-dynamic targets. We demonstrate the practical importance of these results by showing how policy effectiveness (a policy equilibrium) can appear or disappear with small variations in the expectations process or policy rule in a widely used model of monetary policy.Policy games, Policy ineffectiveness, Static controllability, Existence of equilibria, Nash feedback equilibrium

Is Strong Reciprocity a Maladaptation? On the Evolutionary Foundations of Human Altruism

In recent years a large number of experimental studies have documented the existence of strong reciprocity among humans. Strong reciprocity means that people willingly repay gifts and punish the violation of cooperation and fairness norms even in anonymous one-shot encounters with genetically unrelated strangers. We provide ethnographic and experimental evidence suggesting that ultimate theories of kin selection, reciprocal altruism, costly signaling and indirect reciprocity do not provide satisfactory evolutionary explanations of strong reciprocity. The problem of these theories is that they can rationalize strong reciprocity only if it is viewed as maladaptive behavior whereas the evidence suggests that it is an adaptive trait. Thus, we conclude that alternative evolutionary approaches are needed to provide ultimate accounts of strong reciprocity.

Complexity Theory, Adaptation, and Administrative Law

Recently, commentators have applied insights from complexity theory to legal analysis generally and to administrative law in particular. This Article focuses on one of the central problems that complexity. theory addresses, the importance and mechanisms of adaptation within complex systems. In Part I, the Article uses three features of complex adaptive systems-emergence from self-assembly, nonlinearity, and sensitivity to initial conditions-and explores the extent to which they may add value as a matter of positive analysis to the understanding of change within legal systems. In Part H, the Article focuses on three normative claims in public law scholarship that depend explicitly or implicitly on notions of adaptation: that states offer advantages over the federal government because experimentation can make them more adaptive, that federal agencies should themselves become more experimentalist using the tool of adaptive management, and that administrative agencies shou Id adopt collaborative mechanisms in policymaking. Using two analytic tools found in the complexity literature, the genetic algorithm and evolutionary game theory, the Article tests the extent to which these three normative claims are borne out

Does it pay to play? How bargaining shapes donor participation in the funding of environmental protection

Multilateral funding for global environmental protection, such as biodiversity conservation, requires donor participation. When are donors willing to participate? We examine a game-theoretic model of multilateral funding for environmental projects in developing countries. Donors must first decide whether to participate in a multilateral institution. They do so in anticipation of a bargaining outcome that depends on their participation decisions. The multilateral institution then bargains with a recipient over the distribution of gains from project implementation. We find that the donors' and the recipient's vulnerability to negative environmental externalities have diverging effects on their participation behavior. As donors' vulnerability to negative externalities increases, their bargaining power decreases and fewer donors participate. But as the recipient's vulnerability increases, more donors participate because their bargaining power grows. These findings can illuminate bargaining over multilateral climate finance and inform the design of international institutions

Tinbergen and Theil Meet Nash: Controllability in Policy Games

This paper generalizes the classical theory of economic policy to a static LQ-strategic context between n players. We show how this generalized version of controllability can profitably be used to deal with policy ineffectiveness issues and Nash equilibrium existence.Policy games, policy ineffectiveness, static controllability, Nash equilibrium existence