International Cooperation, Coalitions Stability and Free Riding in a Game of Pollution Control

Abstract

We consider a set of countries that wish to sign an international agreement to control pollution. The problem is studied from the perspective of cooperative games and three possible definitions of the characteristic function of the game are analyzed. We further address the issue of free riding and the stability of coalitions. The challenge is to find a possible reconciliation of the two approaches. In other words, we are looking for a payment function which ensures the formation and stability of a large coalition, even if we consider that different countries are playing noncooperatively and are acting only in their own interest. Our results suggest that it is difficult to deter free riding and that no large coalition can emerge if countries decide to play non-cooperatively.

Conflict analysis in environmental management

“…Research by Breton et al (2006Breton et al ( , 2008 in the area of IEAs has focused on the stability of the large coalitions needed to undertake such multinational abatement programs. Breton et al's (2006) paper is an examination of the need for cooperation among DMs in order to form a large stable coalition and deter free-riders in the EA.…”

Stability of international environmental agreements: an illustration with asymmetrical countries

“…The advantage of this approach with respect to the previous one is that each equilibrium problem now involves finding a Nash equilibrium of a two‐player non‐cooperative game, however, it may not lead to a superadditive characteristic function. For an example in the context of IEAs, see Breton et al (2006). A third possibility is to follow von Neumann and Morgenstern (1944) and suppose that the LOP form an anti‐coalition whose sole aim is to minimize the payoff of coalition S , which transforms the computation of v ( S ) into the simple problem of finding a solution to a zero‐sum game.…”

Forming coalitions to negotiate North–South climate agreements

“…The bulk of the literature on IEA focuses on the formation of a single coalition, chiefly using the concept of internal and external stability from non-cooperative game theory (Finus, 2001). Another branch of the literature initiated by Chander and Tulkens (1997) uses cooperative game theory to determine transfer schemes that ensure the non-emptiness of the core, but without modeling negotiations explicitly and without analyzing the role of bargaining power (see Breton et al (2006) for a discussion of the differences between these two approaches). Another branch of the literature initiated by Chander and Tulkens (1997) uses cooperative game theory to determine transfer schemes that ensure the non-emptiness of the core, but without modeling negotiations explicitly and without analyzing the role of bargaining power (see Breton et al (2006) for a discussion of the differences between these two approaches).…”