A Core-Theoretic Solution for the Design of Cooperative Agreements on Transfrontier Pollution

Creators: Chander, Parkash; Tulkens, Henry

Abstract

The paper highlights the relevance of the game theoretic concept of the core of a cooperative game for the design of international treaties on transfrontier pollution. Specifically, a formula is offered for allocating abatement costs between the countries involved for which the justification is of core-theoretic nature. The analysis emphasizes the strategic role of monetary transfers among the countries.

Additional Information

Thanks are due to Karl Goran Maler for numerous fruitful discussions and his hospitality at the Beijer Institute for Ecological Economics, Royal Swedish Academy of Sciences, Stockholm, during May-June 1993. The first author is also grateful to California Institute of Technology for providing a stimulating environment for the completion of this work. This research is part of the Commission of the European Communities (DG XII) "Environmental Policy, International Agreements and International Trade," administered by Alistair Ulph through CEPR, London. Published as Chander, Parkash, and Henry Tulkens. "A core-theoretic solution for the design of cooperative agreements on transfrontier pollution." In Public goods, environmental externalities and fiscal competition, pp. 176-193. Springer US, 2006.

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