Unilateral Emissions Abatement: An Experiment

28 Pages Posted: 2 Apr 2004

See all articles by Joachim Weimann

Joachim Weimann

Otto-von-Guericke-Universität Magdeburg - Institute of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Bodo Sturm

Leipzig University of Applied Sciences - HTWK Leipzig

Date Written: March 2004

Abstract

According to the model of HOEL (1991), a unilateral emissions abatement of a global pollutant leads to lower aggregated emissions in a game with a simultaneous decision protocol. Our experiment tests the Hoel model and examines the question of whether a leader can induce additional abatement of followers in a game with a mixed sequential-simultaneous decision protocol. Using an environment with a unique interior equilibrium, our experiments confirm the stylized outcomes of previous public good experiments. Changes in abatement and profits for the simultaneous decision protocol are in line with the theoretical predictions of the Hoel model albeit not significantly in every case. In the treatments with a mixed sequential-simultaneous decision protocol, during the first periods an abatement near social optimum is mostly chosen by the leader. However, in most cases the leader failed to induce cooperation, i.e. there are few followers who react cooperatively to the leader's signal. High efforts by the leader and the cooperative followers are exploited by the majority of defective followers.

JEL Classification: Q50

Suggested Citation

Weimann, Joachim and Sturm, Bodo, Unilateral Emissions Abatement: An Experiment (March 2004). Available at SSRN: https://ssrn.com/abstract=526003 or http://dx.doi.org/10.2139/ssrn.526003

Joachim Weimann (Contact Author)

Otto-von-Guericke-Universität Magdeburg - Institute of Economics and Business Administration ( email )

Universitaetsplatz 2
Magdeburg, 39016
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Bodo Sturm

Leipzig University of Applied Sciences - HTWK Leipzig ( email )

Leipzig
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
91
Abstract Views
2,001
Rank
524,357
PlumX Metrics