Research

Publications

"Strategic Delegation in the Formation of International Environmental Agreements",  with Ralph Winkler (2022)

(published in European Economic Review) 

We reassess the well-known “narrow-but-deep” versus “broad-but-shallow” trade-off in international environmental agreements (IEAs), taking into account the principal-agent relationship induced by the hierarchical structure of international policy. To this end, we expand the modest coalition formation game, in which countries first decide on whether to join an agreement and then decide on emissions by a strategic delegation stage. In the weak delegation game, principals first decide whether to join an IEA, then delegate the domestic emission choices to an agent. Finally, agents in all countries decide on emissions. In countries not joining the IEA, agents choose emissions to maximize their own payoff, while agents of countries joining the IEA set emissions to internalize some exogenously given fraction  of the externalities that own emissions cause on all members of the IEA. In the strong delegation game principals first delegate to agents, which then decide on membership and emissions. We find that strategic delegation crowds out all efforts to increase coalition sizes by less ambitious agreements in the weak delegation game, while in the strong delegation game the first-best from the principals’ point of view can be achieved.

Work in Progress


This paper investigates the role that domestic elections play for IEAs and to what extent they might be an explanatory factor for the modest success of re- cent international cooperation on climate change mitigation. Agents involved in international negotiations are often subject to domestic electoral concerns and therefore, policy decisions might affect their chances of reelection in upcoming elections. Also, international treaties usually last beyond a governments’ incum- bency, which implies that the negotiation and the ratification decision might be made by two different entities. I formulate a 4-stage game modelling a bilateral environmental agreement in order to analyse the arising strategic incentives de- pending on the level of political polarisation. I find that incumbent governments mostly choose suboptimal treaties compared to if there was no election in order to boost their chances of reelection. Additionally, I find that increased political polarisation generally leads to more distorted treaties and worse outcomes from the perspective of the median voter.

We analyse a threshold public goods game in which players have varying benefits from public goods provision, motivated by the existence of large heterogeneities between countries in international environmental cooperation. The setup chosen specifically allows for an analysis of the trade-off between efficiency and equity. We choose a preference specification allowing for a variety of other-regarding preferences and hypothesize that benefit symmetry among players facilitates co- ordination due to converging focal points of efficiency and equity. Increasing degrees of asymmetry lead to diverging focal points, rendering cooperation more difficult. Our theoretical predictions are supported by preliminary experimental evidence. We find that provision is most frequent when players are symmetric. While increasing the degree of asymmetry does not significantly hamper provi- sion success, contributions become more volatile the more heterogeneous players are. Analysing how players share contribution costs, we see that the extent of asymmetry is not salient, leading to relatively constant burden-sharing across treatments despite varied levels of inequity.

This project aims at investigating how the presence of behavioural voters might be an explanatory factor for the political unpopularity and infeasibility of carbon taxes. Could it explain why some voters are, seemingly, voting against their own self-interests regarding environmental regulation? If so, what are policy implications? If (some) voters are behavioural, they potentially i) do not rationally react to the tax and ii) do not correctly assess their welfare under carbon taxation. As a consequence, it can then happen that a regulatory policy theoretically capable of winning a majority (e.g. the optimal Pigou tax), is rejected at the ballot. In order to determine a potential second-best carbon tax, I suggest an optimal carbon tax game accounting for the behavioural biases assumed.