Providing global public goods under uncertainty

Authors: Boucher, VincentBramoullé, Yann
Abstract: We study how uncertainty and risk aversion affect international agreements to supply global public goods. We consider a benchmark model with homogeneous countries and linear payoffs. When countries directly contribute to a public good, uncertainty tends to lower signatories' efforts but may increase participation. Despite risk aversion, uncertainty may improve welfare. In contrast, when countries try to reduce a global public bad, uncertainty tends to increase signatories' efforts and decrease participation. In that case, an ex-ante reduction of uncertainty may have a large positive multiplier effect on welfare.
Document Type: Article de recherche
Issue Date: 15 June 2010
Open Access Date: 3 April 2018
Document version: AM
This document was published in: Journal of public economics, Vol. 94 (9-10), 591-603 (2010)
North Holland Pub. Co.
Alternative version: 10.1016/j.jpubeco.2010.06.008
Collection:Articles publiés dans des revues avec comité de lecture

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