Research

Abstract

This paper delves into the consequences of reciprocal preferences and countries' expectations towards each other in the context of international agreements aimed at providing global public goods. Reciprocal countries reward kindness (positive reciprocity) while retaliating against unkind behavior (negative reciprocity). We introduce a model where countries decide not only to participate but also determine the extent of their effort.

We demonstrate that reciprocal preferences can exert both positive and negative influences on the effort put forth by the signatories and non-signatories of a treaty, contingent upon their expectations towards others. When reciprocity concerns are limited, participation in a stable treaty either remains unchanged or contracts. However, sufficiently robust reciprocal preferences can lead to the formation of a stable grand coalition. Furthermore, we extend our model to a heterogeneous case where reciprocal and self-interested motivations coexist. Additionally, we explore a scenario in which a single country strategically and unilaterally employs its expectations towards others.