[PDF][PDF] School of Economic Sciences

A Espinola-Arredondo - 2012 - core.ac.uk
2012core.ac.uk
This paper investigates the role of uncertainty as a tool to support cooperation in inter#
national environmental agreements. We consider two layers of uncertainty. Under unilateral
uncertainty, treaties become successful with positive probability in the signaling game, even
under parameter conditions for which no agreement is reached under complete information.
Under bilateral uncertainty, a separating equilibrium emerges where countries participate in
the treaty. We then demonstrate under which conditions further layers of uncertainty are …
Abstract
This paper investigates the role of uncertainty as a tool to support cooperation in inter# national environmental agreements. We consider two layers of uncertainty. Under unilateral uncertainty, treaties become successful with positive probability in the signaling game, even under parameter conditions for which no agreement is reached under complete information. Under bilateral uncertainty, a separating equilibrium emerges where countries participate in the treaty. We then demonstrate under which conditions further layers of uncertainty are welfare improving.
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