RESEARCH
RESEARCH PAPERS
‘Self-enforcing climate coalitions for farsighted countries: integrated analysis of heterogeneous countries', joint with Maria Arvaniti and Rick van der Ploeg [Job Market Paper] Department of Economics Discussion Paper Series at the University of Oxford, No. 971; CESifo Working Paper No. 9768
Abstract: This paper studies the formation of international climate coalitions by heterogeneous countries. Countries rationally predict the consequences of their membership decisions in climate negotiations. We offer an approach to characterise the equilibrium number of coalitions and their number of signatories independent of heterogeneity, and we suggest a tractable algorithm to fully characterise the equilibrium. In a dynamic game analysis of a general equilibrium model of the economy integrated with climate dynamics, a grand climate coalition or multiple climate coalitions may form in equilibrium, but if the policymakers are patient, the number of signatories in all climate treaties is a Tribonacci number. Our results are robust to the possibility of renegotiation and investment in green technologies besides fossil fuels.
'Coalition Formation under Uncertainty and the Power of Information Design' , 2022
Abstract: I examine coalition formation in a public-good game under uncertainty and characterise the unique stable coalition structure at each expected value of the social benefit of the public good. By assuming farsightedness, I show that higher expectations about the social benefit lead to improved efficiency. This result resolves the small-coalition paradox in the literature on stochastic International Environmental Agreements. Furthermore, invoking the communication of information by central authorities, I propose a new approach for implementing stable coalitions.
Abstract: This paper develops a framework to examine the role of public information in dynamic self-enforcing International Environmental Agreements (IEAs) on climate change, where the countries interact either in implicit or in coalitional agreements. In a stochastic model, where the social cost of Greenhouse Gasses (GHG) is an unknown random variable, an information sender, such as the Intergovernmental Panel on Climate Change (IPCC), can control the release of verifiable information about the unknown state variable to the countries. We show that the communication of information can lead to an increase in the emission abatement levels of the countries, even that of the free riders of a climate coalition, and potentially increases size of the climate coalition. We derive the equilibrium learning outcome of both dynamic games. Among all cases, in only one clearly defined case the sender and the society as a whole benefit from withholding information. However, this case vanishes as the sender gets perfectly informed about the underlying social cost.
Panic-Based Overfishing In Transboundary Fisheries- Environmental and Resource Economics , 2019
Abstract: This paper analyses sustainability of bilateral harvesting agreements in transboundary fisheries. Harvesting countries obtain public and private assessments regarding their stock of fish, and the stock experiences ecological changes. In addition to biological uncertainty, countries may face strategic uncertainty. A country that receives negative assessments about the current level of fish stock, may become 'pessimistic' about the assessment of the other coastal state, and this can ignite 'panic-based' overfishing. The paper examines the likelihood of overfishing and suggests a unique prediction about the possibility of abiding by bilateral fishing agreements. Conditions under which the outcome of the asymmetric-information model reduces to the symmetric-information game are discussed, and optimal policy instruments for intergovernmental management of the stock are offered.
WORK IN PROGRESS
‘Optimal Design of Climate Negotiations’
'Optimal Transfer Schemes in Climate Treaties', joint with Maria Arvaniti and Rick van der Ploeg
'Conservation and Pandemics’
'Information and Negotiations of Climate Coalitions'