RESEARCH
RESEARCH PAPERS
‘Climate Coalitions with Sophisticated Policy Makers', joint with Maria Arvaniti and Rick van der Ploeg [Job Market Paper] CESifo Working Paper No. 9768
Abstract: We study the formation of international climate coalitions with sophisticated policy makers. They strategically predict the consequences of their membership decisions in climate negotiations, and they use an integrated assessment model of the economy and the climate in their decision making. We analytically characterise the equilibrium number of coalitions and their number of signatories with certain types of heterogeneity. With a richer structure of energies we also investigate numerically possible coalition outcomes for a calibrated model. We confirm our analytical heterogeneity results and in contrast to earlier approaches to coalition formation based on internal and external stability, much larger coalitions can be sustained in equilibrium and large and small coalitions can exist alongside each other. Sophisticated policy makers would lead to more mitigation of global warming.
'Coalition Formation in Public-Good Games and the Power of Information Design' , 2024
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
'Mindset of policymakers matters: cases of climate coalition formation' joint with Amin Mirabdollah, 2024
'Optimal benevolence of North to South on Green Technologies, If Any', joint with Carles Mano-Cabello and Rick van der Ploeg, 2024
‘Optimal Design of Climate Negotiations’
'Conservation and Pandemics’