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The Stackelberg vs. Nash-Cournot Folk-theorem in International Environmental Agreements

Author

Listed:
  • Michael Finus

    (University of Graz, Austria)

  • Francesco Furini

    (University of Hamburg, Germany)

  • Anna Viktoria Rohrer

    (University of Graz, Austria)

Abstract

A commonly reported result in the literature on international environmental agreements (IEAs) is that if coalition members act as Stackelberg leaders (Stackelberg scenario) this leads to larger stable coalitions than if signatories act simultaneously with non-signatories. (Nash-Cournot scenario). This result has been taken for granted, a kind of Folk-theorem, even though it has been proven at best for specific payoff functions, and very often the conclusion is only based on simulations. We prove the Stackelberg vs. Nash-Cournot Folk-theorem based on a generic payoff function for a public good provision game.

Suggested Citation

  • Michael Finus & Francesco Furini & Anna Viktoria Rohrer, 2024. "The Stackelberg vs. Nash-Cournot Folk-theorem in International Environmental Agreements," Graz Economics Papers 2024-02, University of Graz, Department of Economics.
    • Handle: RePEc:grz:wpaper:2024-02
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    More about this item

    Keywords

    International environmental agreements; Stability; Stackelberg vs. Nash-Cournot Folk-theorem.;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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