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On the Stability of a Two-Player International Environmental Agreement with Intra-Industry Trade

  • Sébastien DebiaEmail author
Chapter
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 280)

Abstract

An international environmental agreement is an unstable coalition by nature, which results in a drive to design mechanisms to provide stability. This note numerically shows that when an international environmental agreement is coupled with intra-industry trade with complementary intermediate goods, then two-player cooperation is a Nash equilibrium. This result may be of interest given that over half the trade between developed countries is intra-industry.

Keywords

International environmental agreement Intra-industry trade Cooperative game 

Notes

Acknowledgements

The author wishes to thank Michèle Breton, the two anonymous referees, and the co-editors for their comments. Any remaining errors are the author’s own.

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Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.HEC MontréalMontréalCanada

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