How the Rules of Coalition Formation Affect Stability of International Environmental Agreements

This paper compares stability of international environmental agreements for six different rules of coalition formation under very general conditions (any type of heterogeneity between countries). The rules can be interpreted as different institutional settings in which treaty formations take place and/or different designs of agreements. We consider open and restricted open membership game as well as four exclusive membership games with different degrees of unanimity required to form coalitions. From a policy perspective, counterintuitively, it turns out that stability is higher under exclusive than under open membership and stability increases with the degree of unanimity. We discuss the policy implications of our result for future treaty-making.Non-cooperative game theory, Rules of coalition formation, Stability

A Non-cooperative Foundation of Core-Stability in Positive Externality NTU-Coalition Games

We identify the core as an appealing stability concept of cooperative game theory, but argue that the non-cooperative approach has conceptual advantages in the context of economic problems with externalities. Therefore, we derive a non-cooperative foundation of core-stability for positive externality NTU-games. First, in the spirit of Hart/Kurz (1983), we develop a game that we call ?-game and show that strong Nash equilibria coalition structures in this game are identical to ?- and ?-core stable coalition structures. Second, as a by-product of the definition of the ?-game, we develop an extension called an ?-game. Finally, we compare equilibria in the ?- and ?-game with those in the ?- and ?-game of Hart and Kurz (1983).Core-stability, non-cooperative game theory, positive externality games

Simulating a Sequential Coalition Formation Process for the Climate Change Problem: First Come, but Second Served?

We analyze stability of self-enforcing climate agreements based on a data set generated by the CLIMNEG world simulation model (CWSM), version 1.2. We consider two new aspects which appear important in actual treaty-making. First, we consider a sequential coalition formation process where players can make proposals which are either accepted or countered by other proposals. Second, we analyze whether a moderator, like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordinating actions by making recommendations that must be Pareto-improving to all parties. We discuss the conceptual difficulties of implementing our algorithm.International Climate Agreements, Sequential Coalition Formation, Coordination through Moderator, Integrated Assessment Model, Algorithm for Computations

Uniqueness of Coalitional Equilibria

We provide an existence and a uniqueness result for coalitional equilibria of a game in strategic form. Both results are illustrated for a public good game and a homogeneous Cournot-oligopoly game.Existence and uniqueness of coalitional equilibrium, Game in strategic form

Simulating a Sequential Coalition Formation Process for the Climate Change Problem: First Come, but Second Served?

We analyze stability of self-enforcing climate agreements based on a data set generated by the CLIMNEG world simulation model (CWSM), version 1.2. We consider two new aspects which appear important in actual treaty-making. First, we consider a sequential coalition formation process where players can make proposals which are either accepted or countered by other proposals. Second, we analyze whether a moderator, like an international organization, even without enforcement power, can improve upon globally suboptimal outcomes through coordinating actions by making recommendations that must be Pareto-improving to all parties. We discuss the conceptual difficulties of implementing our algorithm

Toward a positive theory of coalition formation and endogenous instrumental choice in global pollution control

SIGLEAvailable from Bibliothek des Instituts fuer Weltwirtschaft, ZBW, D-21400 Kiel W 691 (239) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman

Membership Rules and Stability of Coalition Structures in Positive Externality Games

This paper compares the stability of coalition structures under six institutional settings of treaty formation in positive externality games. We argue that many economic problems belong to the class of positive externality games (i.e. outsiders benefit from the formation of coalitions) and hence our results can be applied to many situations. It is shown that it is easier to sustain agreements under exclusive than under open membership and the higher the “degree of consensus” necessary to form a coalition