Members, Joiners, Free-riders, Supporters

Arbeitspapier

We augment the standard cartel formation game from non-cooperative coalition theory, often applied in the context of international environmental agreements on climate change, with the possibility that singletons support coalition formation without becoming coalition members themselves. Rather, their support takes the form of a monetary transfer to the coalition, which increases the members' payoffs, and thereby provides an incentive for other singletons to join the coalition. We show that, under mild conditions on the costs and benefits of contributing to the public good (i.e. abatement of CO₂ emissions), supporters exist in equilibrium. The existence of supporters increases the size of stable coalitions, increases abatement of CO₂ emissions, and increases payoffs to each of four types of agents: members, joiners, free-riders, and supporters. Importantly, this result does not require commitment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 15-015/VIII

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Institutions: Design, Formation, Operations, and Impact
• Subject: Coalition formation ; Public goods ; Support ; Transfers ; International Environmental Agreements

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ansink, Erik ; Withagen, Cees
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/107880
• Last update: 10.03.2025, 11:41 AM CET