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On the Stability of a Two-Player International Environmental Agreement with Intra-Industry Trade

In: Games in Management Science

Author

Listed:
  • Sébastien Debia

    (HEC Montréal)

Abstract

An international environmental agreement is an unstable coalition by nature, which results in a drive to design mechanisms to provide stability. This note numerically shows that when an international environmental agreement is coupled with intra-industry trade with complementary intermediate goods, then two-player cooperation is a Nash equilibrium. This result may be of interest given that over half the trade between developed countries is intra-industry.

Suggested Citation

  • Sébastien Debia, 2020. "On the Stability of a Two-Player International Environmental Agreement with Intra-Industry Trade," International Series in Operations Research & Management Science, in: Pierre-Olivier Pineau & Simon Sigué & Sihem Taboubi (ed.), Games in Management Science, pages 369-380, Springer.
    • Handle: RePEc:spr:isochp:978-3-030-19107-8_20
    DOI: 10.1007/978-3-030-19107-8_20
    as

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