The paper proposes a dynamic game about the process of formation and stability of international environmental agreements (IEAs) in which abatement levels are associated with the stock pollutant evolution. The model assumes that both countries that ratify an agreement and the stock of accumulated pollution evolve over time. We propose an evolutionary mechanism, based on replicator dynamics, that describes how the population share of signatories countries updates over time. It postulates that players are boundedly rational and make their choices by adopting the more rewarding behavior that emerges from available observation of others’ behaviors. We show that the formation of an IEA cannot be sustained in general, but only if additional considerations are taken into account. In particular, we introduce a positive externality represented by R&D investments in green technologies. In the cooperation, countries coordinate their R&D activities sharing the investments in order to avoid duplication of green activities; otherwise, the non-cooperators support completely their R&D investments for clean technologies. This aspect encourages the formation of coalitions determining conditions such that the Grand Coalition is stable.

An Evolutionary Game Approach in International Environmental Agreements with R&D Investment

Marta, Biancardi;Giovanni, Villani
2019

Abstract

The paper proposes a dynamic game about the process of formation and stability of international environmental agreements (IEAs) in which abatement levels are associated with the stock pollutant evolution. The model assumes that both countries that ratify an agreement and the stock of accumulated pollution evolve over time. We propose an evolutionary mechanism, based on replicator dynamics, that describes how the population share of signatories countries updates over time. It postulates that players are boundedly rational and make their choices by adopting the more rewarding behavior that emerges from available observation of others’ behaviors. We show that the formation of an IEA cannot be sustained in general, but only if additional considerations are taken into account. In particular, we introduce a positive externality represented by R&D investments in green technologies. In the cooperation, countries coordinate their R&D activities sharing the investments in order to avoid duplication of green activities; otherwise, the non-cooperators support completely their R&D investments for clean technologies. This aspect encourages the formation of coalitions determining conditions such that the Grand Coalition is stable.
File in questo prodotto:
File Dimensione Formato  
Villani-Biancardi2019_Article_AnEvolutionaryGameApproachInIn.pdf

non disponibili

Tipologia: Documento in Post-print
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 467.82 kB
Formato Adobe PDF
467.82 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11586/226452
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 3
  • ???jsp.display-item.citation.isi??? 3
social impact