Avoiding an uncertain catastrophe: climate change mitigation under risk and wealth heterogeneity
For environmental problems such as climate change, uncertainty about future conditions makes it difficult to know what the goal of mitigation efforts should be, and inequality among the affected parties makes it hard for them to know how much they each should do toward reaching the goal. We examine the effects of scientific uncertainty and wealth inequality in experiments where subjects decide how much to contribute toward reducing a common threat. We also explore how the framing of uncertainty affects collective action. Our results suggest that uncertainty lowers contributions, but contributions remain surprisingly high even in treatments with a variable loss probability, where such behavior is individually suboptimal (and where the underlying game is a prisoner’s dilemma). Further, we find that the characterization of uncertainty is crucial and that inequality need not lower contributions at all.
KeywordsNash Equilibrium Payoff Income Inequality Loss Probability Scientific Uncertainty
We thank Paul Bell, Gretchen Nurse Rainbolt, Christopher Goemans, Nicholas Janusch, Alexander Maas, and seminar participants at the CU Environmental and Resource Economics Workshop, Beaver Creek, CO; Workshop on Behavioral and Experimental Economics, Florence, Italy; International Symposium on Society and Resource Management, Estes Park, CO; and Potsdam Institute for Climate Impact Research, Potsdam, Germany.
TCB and SK shared equally in all aspects of the research and writing.
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Conflict of interest
The authors declare that they have no conflict of interest
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