A MECHANISM DESIGN APPROACH TO CLIMATE-CHANGE AGREEMENTS
Abstract
We take a mechanism design perspective to investigate how environmental agreements should account for multilateral externalities, incentive compatibility, and voluntary participation by sovereign countries. The optimal mechanism involves a tradeoff between a free rider problem in the effort provision of participating countries and the necessity of inducing countries to ratify the agreement. This mechanism can be approximated by a simple menu with attractive implementation and robustness properties. Limits on enforcement and commitment might nevertheless hinder the performance of this menu, making the “business as usual” scenario more likely.
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Combined with mechanism design, such approaches can be used to design methods for cooperation that lead to mutually beneficial outcomes, for example when formalizing procedures around international climate agreements.
“Combined with mechanism design, 30 such approaches can be used to design methods for cooperation that lead to mutually beneficial outcomes, for example when formalizing procedures around international climate agreements [522,641].”
From Tackling climate change with machine learning (2023) · cites this paper as [522]
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Tackling climate change with machine learning
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- Authors
- Martimort, D., & Sand-Zantman, W.
- Affiliations
- Paris School of Economics (FR)
- Toulouse School of Economics ESSEC Business School
- ORCID
- Martimort, David
- Venue
- Journal of the European Economic Association
- Publisher
- Oxford University Press (OUP)
- Published
- 2015-09-15
- Volume
- 14
- Issue
- 3
- Pages
- 669-718
- ISSN
- 1542-4766 (ISSN-L)
- OpenAlex
- W1922379506
- Cited by
- 53
- References
- 72
- Citations by year
- 2026: 4 · 2025: 2 · 2024: 7 · 2023: 1 · 2022: 9 · 2021: 5 · 2020: 5 · 2019: 7 · 2018: 4 · 2017: 3 · 2016: 1 · 2015: 3 · 2012: 1
- FWCI
- 8.86
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of the European Economic Association (publishedVersion)
- HAL (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Game Theory and Voting Systems
- Social Sciences › Decision Sciences › Management Science and Operations Research › Game Theory and Applications
- Keywords
- mechanism design, climate agreements, international climate policy, cooperative game theory
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