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|Abstract:||© 2016 by The University of Chicago. All rights reserved. We analyze participation in international environmental agreements in a dynamic game in which countries pollute and invest in green technologies. If complete contracts are feasible, participants eliminate the holdup problem associated with their investments; however, most countries prefer to free ride rather than participate. If investments are non contractible, countries face a hold up problem every time they negotiate; but the free-rider problem can be mitigated and significant participation is feasible. Participation becomes attractive because only large coalitions commit to long-term agreements that circumvent the holdup problem. Under well-specified conditions even the first-best outcome is possible when the contract is incomplete.|
|Citation:||Battaglini, M, Harstad, B. (2016). Participation and duration of environmental agreements. Journal of Political Economy, 124 (1), 160 - 204. doi:10.1086/684478|
|Pages:||160 - 204|
|Type of Material:||Journal Article|
|Journal/Proceeding Title:||Journal of Political Economy|
|Version:||Final published version. Article is made available in OAR by the publisher's permission or policy.|
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