Advertisement

Environmental and Resource Economics

, Volume 70, Issue 2, pp 343–362 | Cite as

Climate Negotiations in the Lab: A Threshold Public Goods Game with Heterogeneous Contributions Costs and Non-binding Voting

  • Christian FeigeEmail author
  • Karl-Martin Ehrhart
  • Jan Krämer
Article

Abstract

We model the climate negotiations and the countries’ individual commitments to carbon dioxide reductions as a threshold public goods game with uncertain threshold value. We find that a non-binding unanimous voting procedure on contribution vectors leads to frequent agreement on an optimal total contribution and high rates of compliance, even in the case of heterogeneous marginal contribution costs. However, groups that do not reach agreement perform worse than the baseline treatments without a voting procedure. The contribution vectors chosen by the groups point to a predominant burden-sharing rule that equalizes individual contribution costs, even at the cost of the group’s total payoff.

Keywords

Burden sharing Climate change Heterogeneity Threshold public good Threshold uncertainty Unanimous voting 

Notes

Acknowledgements

We appreciate helpful comments by Timo Goeschl (the editor), Carlo Gallier, Jan Kersting, Martin Kesternich, and several anonymous reviewers, as well as the participants at the GfeW Jahrestagung 2013, the 51st Annual Meetings of the Public Choice Society, and the 2014 Spring Meeting of Young Economists. Karl-Martin Ehrhart acknowledges funding by the German Federal Ministry for Education and Research (grant number: 01LA1127B). We also thank Ann-Katrin Hanke and Nayeli Gast-Zepeda for indispensable research assistance.

Compliance with Ethical Standards

Conflicts of interest

The authors declare that they do not have any conflicts of interest.

Informed Consent

Informed consent was obtained from all individual participants included in the study.

Supplementary material

10640_2017_123_MOESM1_ESM.pdf (101 kb)
Online Resource Experimental instructions to investigated treatments.

References

  1. Ackerman F, Stanton EA, Bueno R (2013) CRED: a new model of climate and development. Ecol Econ 85:166–176. doi: 10.1016/j.ecolecon.2011.04.006 CrossRefGoogle Scholar
  2. Alberti F, Cartwright EJ (2016) Full agreement and the provision of threshold public goods. Public Choice 166:205–233. doi: 10.1007/s11127-016-0321-z CrossRefGoogle Scholar
  3. Bagnoli M, Lipman BL (1989) Provision of public goods: Fully implementing the core through private contributions. Rev Econ Stud 56:583–601CrossRefGoogle Scholar
  4. Bagnoli M, Lipman BL (1992) Private provision of public goods can be efficient. Public Choice 74:59–78CrossRefGoogle Scholar
  5. Barrett S (1994) Self-enforcing international environmental agreements. Oxford Econ Pap 46:878–894 Special Issue on Environmental EconomicsCrossRefGoogle Scholar
  6. Barrett S (2013) Climate treaties and approaching catastrophes. J Environ Econ Manag 66(2):235–250. doi: 10.1016/j.jeem.2012.12.004 CrossRefGoogle Scholar
  7. Barrett S, Dannenberg A (2012) Climate negotiations under scientific uncertainty. PNAS 109(43):17,372–17,376. doi: 10.1073/pnas.1208417109 CrossRefGoogle Scholar
  8. Barrett S, Dannenberg A (2014) Sensitivity of collective action to uncertainty about climate tipping points. Nat Clim Chang 4:36–39. doi: 10.1038/NCLIMATE2059 CrossRefGoogle Scholar
  9. Benoit JP, Krishna V (1993) Renegotiation in finitely repeated games. Econometrica 61(2):303–323CrossRefGoogle Scholar
  10. Brekke KA, Konow J, Nyborg K (2012) Cooperation is relative: income and framing effects with public goods. http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2012/Memo-16-2012.pdf. Memorandum No. 16/2012. Department of Economics, University of Oslo
  11. Burton-Chellew MN, May RM, West SA (2013) Combined inequality in wealth and risk leads to disaster in the climate change game. Climatic Change 120:815–830. doi: 10.1007/s10584-013-0856-7 CrossRefGoogle Scholar
  12. Carraro C, Siniscalco D (1993) Strategies for the international protection of the environment. J Public Econ 52:309–328CrossRefGoogle Scholar
  13. Chander P, Tulkens H (1995) A core-theoretic solution for the design of cooperative agreements on transfrontier pollution. Int Tax Public Finan 2:279–293CrossRefGoogle Scholar
  14. Cherry TL, McEvoy DM (2013) Enforcing compliance with environmental agreements in the absence of strong institutions: An experimental analysis. Environ Resour Econ 54:63–77. doi: 10.1007/s10640-012-9581-3 CrossRefGoogle Scholar
  15. Croson R, Marks M (2000) Step returns in threshold public goods: a meta- and experimental analysis. Exp Econ 2:239–259CrossRefGoogle Scholar
  16. Croson R, Marks M (2001) The effect of recommended contributions in the voluntary provision of public goods. Econ Inq 39(2):238–249CrossRefGoogle Scholar
  17. Dannenberg A, Löschel A, Paolacci G, Reif C, Tavoni A (2015) On the provision of public goods with probabilistic and ambiguous thresholds. Environ Resour Econ 61:365–383. doi: 10.1007/s10640-014-9796-6 CrossRefGoogle Scholar
  18. Engström G, Gars J (2016) Climatic tipping points and optimal fossil-fuel use. Environ Resour Econ 65(3):541–571. doi: 10.1007/s10640-016-0042-2 CrossRefGoogle Scholar
  19. Farrell J (1993) Meaning and credibility in cheap-talk games. Game Econ Behav 5:514–531CrossRefGoogle Scholar
  20. Feige C (2016) Voting and equilibrium selection in threshold public goods games. PhD thesis, Karlsruhe Institute of Technology (KIT). doi: 10.5445/IR/1000062003
  21. Finus M (2001) Game theory and international environmental cooperation. Edward Elgar Publishing, Cheltenham, Northampton, New Horizons in Environmental EconomicsGoogle Scholar
  22. Fischbacher U (2007) z-Tree: Zurich toolbox for ready-made economic experiments. Exp Econ 10(2):171–178. doi: 10.1007/s10683-006-9159-4 CrossRefGoogle Scholar
  23. Gallier C, Kesternich M, Sturm B (2016) Voting for burden sharing rules in public goods games. Environ Resour Econ. doi: 10.1007/s10640-016-0022-6
  24. Greiner B (2015) Subject pool recruitment procedures: organizing experiments with ORSEE. J Econ Sci Assoc 1:114–125. doi: 10.1007/s40881-015-0004-4 CrossRefGoogle Scholar
  25. Hansen J, Sato M, Kharecha P, Beerling D, Berner R, Masson-Delmotte V, Pagani M, Raymo M, Royer DL, Zachos JC (2008) Target atmospheric CO2: Where should humanity aim? Open Atmos Sci J 2:217–231CrossRefGoogle Scholar
  26. Heuson C, Peters W, Schwarze R, Topp AK (2015) Investment and adaptation as commitment devices in climate politics. Environ Resour Econ 62(4):769–790. doi: 10.1007/s10640-015-9887-z CrossRefGoogle Scholar
  27. Hovi J, Ward H, Grundig F (2015) Hope or despair? Formals models of climate cooperation. Environ Resour Econ 62(4):665–688. doi: 10.1007/s10640-014-9799-3 CrossRefGoogle Scholar
  28. IPCC (2014) Climate change 2014: synthesis report. Contribution of working groups I, II and III to the fifth assessment report of the intergovernmental panel on climate change. IPCC, Geneva, SwitzerlandGoogle Scholar
  29. Iris D, Lee J, Tavoni A (2016) Delegation and public pressure in a threshold public goods game: theory and experimental evidence. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2752895, FEEM working paper no. 26.2016
  30. Isaac RM, Schmidtz D, Walker JM (1989) The assurance problem in a laboratory market. Public Choice 62(3):217–236CrossRefGoogle Scholar
  31. Kroll S, Cherry TL, Shogren JF (2007) Voting, punishment, and public goods. Econ Inq 45(3):557–570. doi: 10.1111/j.1465-7295.2007.00028.x CrossRefGoogle Scholar
  32. Li B, Gasser T, Ciais P, Piao S, Tao S, Balkanski Y, Hauglustaine D, Boisier JP, Chen Z, Huang M, Li LZ, Li Y, Liu H, Liu J, Peng S, Shen Z, Sun Z, Wang R, Wang T, Yin G, Yin Y, Zeng H, Zeng Z, Zhou F (2016) The contribution of China’s emissions to global climate forcing. Nature 531:357–361. doi: 10.1038/nature17165 CrossRefGoogle Scholar
  33. McBride M (2010) Threshold uncertainty in discrete public good games: an experimental study. Econ Gov 11:77–99. doi: 10.1007/s10101-009-0069-8 CrossRefGoogle Scholar
  34. Milinski M, Sommerfeld RD, Krambeck HJ, Reed FA, Marotzke J (2008) The collective-risk social dilemma and the prevention of simulated dangerous climate change. PNAS 105(7):2291–2294. doi: 10.1073/pnas.0709546105 CrossRefGoogle Scholar
  35. Milinski M, Röhl T, Marotzke J (2011) Cooperative interaction of rich and poor can be catalyzed by intermediate climate targets. Climatic Change 109:807–814. doi: 10.1007/s10584-011-0319-y CrossRefGoogle Scholar
  36. Moulin H (1988) Axioms of cooperative decision making. Econometric Society Monographs No. 15, Cambridge University Press, CambridgeCrossRefGoogle Scholar
  37. Olivier JGJ, Janssens-Maenhout G, Muntean M, Peters JHAW (2015) Trends in global CO2 emissions—2015 report. Tech. rep., PBL Netherlands Environmental Assessment Agency, JRC report 98184/PBL report 1803Google Scholar
  38. Rapoport A, Suleiman R (1993) Incremental contribution in step-level public goods games with asymmetric players. Organ Behav Hum Dec 55:171–194CrossRefGoogle Scholar
  39. Schelling TC (1980) The strategy of conflict. Harvard University Press, CambridgeGoogle Scholar
  40. Suleiman R, Budescu DV, Rapoport A (2001) Provision of step-level public goods with uncertain provision threshold and continuous contribution. Group Decis Negot 10:253–274CrossRefGoogle Scholar
  41. Tavoni A, Dannenberg A, Kallis G, Löschel A (2011) Inequality, communication, and the avoidance of disastrous climate change in a public goods game. PNAS 108(29):11,825–11,829. doi: 10.1073/pnas.1102493108 CrossRefGoogle Scholar
  42. Tol RSJ (2013) Targets for global climate policy: an overview. J Econ Dyn Control 37:911–928. doi: 10.1016/j.jedc.2013.01.001 CrossRefGoogle Scholar
  43. UNEP (2015) The emissions gap report 2015. Tech. rep, United Nations Environment Program (UNEP), NairobiGoogle Scholar
  44. Waichman I, Requate T, Karde M, Milinski M (2014) Asymmetry enhances success chances for international climate change negotiations. http://www.webmeets.com/files/papers/wcere/2014/1135/Requate-WCERE-2014.pdf. Working Paper. University of Heidelberg
  45. Walker JM, Gardner R, Herr A, Ostrom E (2000) Collective choice in the commons: experimental results on proposed allocation rules and votes. Econ J 110:212–234CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  • Christian Feige
    • 1
    Email author
  • Karl-Martin Ehrhart
    • 1
  • Jan Krämer
    • 2
  1. 1.Karlsruhe Institute of Technology (KIT)Institute of Economics (ECON)KarlsruheGermany
  2. 2.Chair of Internet and Telecommunications BusinessUniversity of PassauPassauGermany

Personalised recommendations