Coordinating to Protect the Global Climate: Experimental Evidence on the Role of Inequality and Commitment

32 Pages Posted: 28 Jul 2010

See all articles by Alessandro Tavoni

Alessandro Tavoni

University of Bologna; London School of Economics & Political Science (LSE)

Astrid Dannenberg

University of Gothenburg

Andreas Löschel

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics

Date Written: July 27, 2010

Abstract

Free riding and coordination difficulties are held to be the primary causes of cooperation breakdown among nonrelatives. These thwarting effects are particularly severe in the absence of effective monitoring institutions capable of sanctioning deviant behavior. Unfortunately, solutions to global environmental dilemmas, like climate change, cannot depend on coercion mechanisms, given the transnational effects of emissions. A further complication is that it yields "common but differentiated responsibilities." Such asymmetries in wealth and carbon responsibilities among the actors, and the ensuing issues of equity, might further impede cooperation. Yet, a growing literature stresses the importance of non-economic factors in explaining human behavior; therefore, instruments that go beyond the traditional incentives might prove effective in facilitating the task. Given the empirical nature of the problem, we address it by means of a controlled laboratory experiment: a framed threshold public goods game is used to investigate the degree of cooperation and coordination achieved by groups of six participants in combating simulated catastrophic climate change. While necessarily simple for the sake of tractability, the game is designed to incorporate key real-world issues, such as inequity and the impact of emergent institutions based on nonbinding "pledge and review" mechanisms.

Keywords: Experimental Economics, Threshold Public Goods Game, Climate Change, Inequality, Pledge

JEL Classification: C72, C92, Q54

Suggested Citation

Tavoni, Alessandro and Dannenberg, Astrid and Löschel, Andreas, Coordinating to Protect the Global Climate: Experimental Evidence on the Role of Inequality and Commitment (July 27, 2010). ZEW - Centre for European Economic Research Discussion Paper No. 10-049, Available at SSRN: https://ssrn.com/abstract=1649486 or http://dx.doi.org/10.2139/ssrn.1649486

Alessandro Tavoni

University of Bologna ( email )

Bologna
Italy
0512098485 (Phone)
40100 (Fax)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://www2.lse.ac.uk/GranthamInstitute/whosWho/Staff/AlessandroTavoni.aspx

Astrid Dannenberg

University of Gothenburg ( email )

Viktoriagatan 30
Göteborg, 405 30
Sweden

Andreas Löschel (Contact Author)

University of Muenster - Chair of Microeconomics, esp. Energy and Resource Economics ( email )

Universitätsstr. 14-16
48143 Munster
Germany

HOME PAGE: http://www.wiwi.uni-muenster.de/eroe

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