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Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision

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  • Wolfgang Buchholz

    (University of Regensburg)

  • Alexander Haupt

    (Plymouth University)

  • Wolfgang Peters

    (European University Viadrina)

Abstract

Analysing cooperative provision of a global public good such as climate protection, we explore the relationship between equitable burden sharing on the one hand and core stability on the other. To assess the size of the burden which a public good contribution entails for a country, we make use of a specific measure based on Moulin (Econometrica 55:963–977, 1987). In particular, we show that a Pareto optimal allocation which is not in the core can always be blocked by a group of countries with the highest Moulin sacrifices. In this sense, it is the ‘overburdening’ and thus ‘unfair’ treatment of some countries that provides the reason for core instability. By contrast, a Pareto optimal allocation is in the core if the public good contributions are fairly equally distributed according to their Moulin sacrifices. The potential implications of our theoretical analysis for global climate policy are also discussed.

Suggested Citation

  • Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2016. "Equity as a Prerequisite for Stability of Cooperation on Global Public Good Provision," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 61-78, September.
    • Handle: RePEc:kap:enreec:v:65:y:2016:i:1:d:10.1007_s10640-015-9907-z
    DOI: 10.1007/s10640-015-9907-z
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    Cited by:

    1. Michael Finus & Bianca Rundshagen, 2016. "Game Theory and Environmental and Resource Economics—In Honour of Alfred Endres, Part Two," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 1-4, September.
    2. Acocella, Nicola & Di Giovanni, Tomasz, 2019. "Natural Resources and Environment Preservation: Strategic Substitutability vs. Complementarity in Global and Local Public Good Provision," International Review of Environmental and Resource Economics, now publishers, vol. 13(3-4), pages 203-227, September.

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    More about this item

    Keywords

    Public goods; Core; Equity; Stability of cooperation;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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