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A core-theoretic solution for the design of cooperative agreements on transfrontier pollution

Chander, Parkash and Tulkens, Henry (1995) A core-theoretic solution for the design of cooperative agreements on transfrontier pollution. International Tax and Public Finance, 2 (2). pp. 279-293. ISSN 0927-5940. doi:10.1007/BF00877502.

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For a simple economic model of transfrontier pollution, widely used in theoretical studies of international treaties bearing on joint abatement, we offer in this paper a scheme for sharing national abatement costs through international financial transfers that is inspired by a classical solution concept from the theory of cooperative games—namely, the core of a game. The scheme has the following properties: total damage and abatement costs in all countries are minimized (optimality property), and no coalition or subset of countries can achieve lower total costs for its members by taking another course of action in terms of emissions or transfers, under some reasonable assumption about the reactions of those not in the coalition (core property). In the concluding section economic interpretations of the scheme are proposed, including its connection with the free-riding problem.

Item Type:Article
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Additional Information:© 1995 Kluwer Academic Publishers.
Subject Keywords:cost of abatement; damage function; free riding; partial agreement Nash equilibrium; γ and α cores; optimal emission policy; international transfers
Issue or Number:2
Record Number:CaltechAUTHORS:20170825-144258635
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Official Citation:Chander, P. & Tulkens, H. Int Tax Public Finan (1995) 2: 279.
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80805
Deposited By: Tony Diaz
Deposited On:28 Aug 2017 20:00
Last Modified:15 Nov 2021 19:38

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