Members, Joiners, Free-Riders, Supporters

29 Pages Posted: 15 Apr 2016

See all articles by Erik Ansink

Erik Ansink

VU University Amsterdam - Department of Spatial Economics

Cees Withagen

Free University of Amsterdam; Tilburg University

Multiple version iconThere are 2 versions of this paper

Date Written: March 10, 2016

Abstract

We augment the standard cartel formation game from non-cooperative coalition theory, often applied in the context of international environmental agreements on climate change, with the possibility that singletons support coalition formation without becoming coalition members themselves. Rather, their support takes the form of a monetary transfer to the coalition, which increases the members’ payoffs, and thereby provides an incentive for other singletons to join the coalition. We show that, under mild conditions on the costs and benefits of contributing to the public good (i.e. abatement of CO2 emissions), supporters exist in equilibrium. The existence of supporters increases the size of stable coalitions, increases abatement of CO2 emissions, and increases payoffs to each of four types of agents: members, joiners, free-riders, and supporters.

Keywords: coalition formation, public goods, support, transfers, international environmental agreements

JEL Classification: C720, D020, H410, Q540

Suggested Citation

Ansink, Erik and Withagen, Cees A. M., Members, Joiners, Free-Riders, Supporters (March 10, 2016). CESifo Working Paper Series No. 5802. Available at SSRN: https://ssrn.com/abstract=2764116

Erik Ansink (Contact Author)

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
1081HV Amsterdam
Netherlands

Cees A. M. Withagen

Free University of Amsterdam ( email )

Tinbergen Institute De Boelelaan 1105
1081 HV Amsterdam
Netherlands

Tilburg University ( email )

Postbus 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

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