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Two countries strategically invest in productive infrastructure within a general equilibrium model with endogenous growth. These public investments generate externalities. Dynamic analysis reveals that: (1) under constant returns, the two countries growth rates differ during the transition but are identical on the balanced growth path, (2) a country with decreasing returns can experience sustained growth provided that the other country grows at a positive constant rate, (3) cooperation does not necessarily lead to higher growth for each country, and it can increase or decrease the gap between countries growth rates depending on the countries consumption preferences regarding domestic and foreign goods.
We develop a model that accounts for the decay of the average contribution observed in experiments on voluntary contributions to a public good. The novel idea is that people's moral motivation is "weak." Their judgment about the right contribution depends on observed contributions by group members and on an intrinsic "moral ideal." We show that the assumption of weakly morally motivated agents leads to the decline of the average contribution over time. The model is compatible with persistence of overcontributions, variability of contributions (across and within individuals), the "restart effect" and the observation that the decay in contributions is slower in longer games. Furthermore, it offers a rationale for conditional cooperation. (This abstract was borrowed from another version of this item.)
No abstract is available for this item.
Chichilnisky's criterion for sustainability has the merit to be, so far, the unique explicit, complete and continuous social welfare criterion that combines successfully the requirement of Weak Pareto with an instrumental notion of intergenerational equity (no dictatorship of the present and no dictatorhsip of the future). But it has one important drawback: in the context of renewable resources, there exists no exploitation path that maximizes this criterion. The present article suggests a way to cope with this weakness. We give good reasons to restrict admissible controls to the set of convex combinations between the discounted utilitarian program and the golden rule program. It is shown that optimal paths in this set exists under rather weak sufficient conditions on the fundamentals of the problem. (This abstract was borrowed from another version of this item.)
We examine experimentally how and why voluntary contributions are affected by sequentiality. Instead of deciding simultaneously in each round, subjects are randomly ordered in a sequence which differs from round to round. We compare sessions in which subjects observe the contributions from earlier decisions in each round ("sequential treatment with information") to sessions in which subjects decide sequentially within rounds, but cannot observe earlier contributions ("sequential treatment without information"). We also investigate whether average contributions are affected by the length of the sequence by varying group size. Our results show that sequentiality alone has no effect on contributions, but that the level of contributions increases when subjects are informed about the contributions of lower-ranked subjects. We provide evidence that the so-called "leadership effect" vanishes within rounds, and that group size has no significant impact on the average level of contributions in our sequential contribution games. (This abstract was borrowed from another version of this item.)
The need for a global agreement to the problem of tropical deforestation has led to the REDD (Reducing Emissions from Deforestation and Degradation) scheme, which proposes that the developed countries pay developing countries for CO 2 emissions saved through avoided deforestation and forest degradation. The remaining issue is specifying the rules defining payments to countries that reduce their deforestation levels. This article develops a game-theoretic bargaining model, simulating the on-going negotiation process which is currently taking place within the Convention on Climate Change, after the Copenhagen agreement of December 2009. It shows that the conditions under which developing countries are left to bargain over the allocation of the global forest fundmay lead to an ineffective system of incentives. Below a given level of contributions from the North, the mechanism fails to curb deforestation. Beyond this level, it induces perverse effects: the larger the North's contribution, the larger the deforestation decisions. Consequently, the mechanism is most effective only at a specific threshold, which, given the unobservability of countries'preferences, can only be found by a repeated "trial and error" implementation process.
In two-player games with negative (positive) spillovers it is well-known that symmetric agents both overact (underact) at the Nash equilibria. We show that for heterogeneous agents this rule of thumb has to be amended if the game features strategic substitutability.
The purpose of this paper is to explore whether international income transfers can improve or worsen the global level of biodiversity and global social welfare by changing the relative contributions to biodiversity protection and to agricultural production. Because of the public good nature of biodiversity, Warr's neutrality theorem suggests that such transfers may have no effects at all (Warr, 1983). A model is developed, based on the simplifying assumption that northern countries have little biodiversity whereas southern countries are endowed with natural capital in the form of (generally unspoilt) biodiversity-rich land. Southern countries allocate optimally land and capital to two competing productive activities, agriculture and eco-tourism. When transfers are organized from the North to the South, we show that Warr's neutrality theorem collapses. Transfers can either reduce or increase the natural capital in the South, depending on some empirically verifiable hypotheses concerning the characteristics of the eco-tourism and agricultural production functions. In addition, we demonstrate that welfare improvements can be obtained even with reductions in the level of biodiversity.
Our current choices regarding the fight against deforestation and climatic disorder, against the overexploitation of natural resources or the erosion of ecologic heritage, have effects which will last long after we disappear. Must we make immediate and major sacrifices for the well-being of our descendants? Speaking only about developed countries, they will anyway be better off than we are if the trend in growth observed for the last two centuries continues. Unless, as scientists and GIEC Experts who work on biodiversity and ecosystem services fear, we are approaching the natural limits which commit here and now our responsibility towards future generations. In a context where current choices have uneven distributed effects in time, how do we arbitrate between the present and future, between the interests of the various generations? One way of considering the problem is to incorporate some normative requirements into a criterion of inter-temporal social choice, and estimate the legitimacy of alternative futures according to their classification by this criterion. This approach results in a general message as important as it is frustrating: looking for the trajectories of management which avoid waste cannot usually be achieved without favouring certain generations. Therefore, the concern for our descendants can be summed up to one question: what are the desirable compromises between efficiency and impartiality? Discounting the utilities of every generation before adding them together is a possible answer. But such a criterion, for a long time applied by default, presents an all the more contestable discrimination against future generations, all the more so as alternatives exist. This note briefly presents the works of the scientists of the SAE2 department on two alternatives to discounting. Chichilnisky’s criterion and the mixed Bentham-Rawls (MBR) criterion are two possible answers to the efficiency-impartiality dilemma.
Nos choix présents en matière de lutte contre la déforestation et le dérèglement climatique, contre la surexploitation des ressources naturelles ou encore contre l’érosion du patrimoine écologique, ont des effets qui persisteront longtemps après notre disparition. Devons-nous pour autant consentir des sacrifices immédiats et importants pour le bien-être de nos descendants ? Ils seront de toutes façons mieux lotis que nous si, pour ne parler que des pays développés, la tendance à la croissance observée sur près de deux siècles se poursuit. A moins que, comme le craignent les experts du GIEC et les scientifiques qui travaillent sur la biodiversité et les services éco-systémiques, nous n’approchions de limites naturelles qui engagent dès à présent notre responsabilité vis-à-vis des générations futures. Dans un contexte où les choix actuels ont des effets inégalement distribués au cours du temps, comment arbitrer entre le présent et le futur, entre les intérêts des différentes générations ? Une façon d’envisager le problème est d’incorporer certaines exigences normatives dans un critère de choix social intertemporel, et d’apprécier la légitimité de futurs alternatifs selon le classement opéré par ce critère. Cette démarche aboutit à un message général aussi important que frustrant : rechercher les trajectoires d’exploitation qui évitent les gaspillages ne peut se faire en général sans privilégier certaines générations. La préoccupation pour nos descendants peut se résumer alors à une question : quels sont les compromis souhaitables entre efficacité et impartialité ? Actualiser les utilités de chaque génération avant d’en faire la somme est une réponse possible. Mais un tel critère, longtemps appliqué par défaut, pratique une discrimination à l’encontre des générations futures d’autant plus attaquable que des alternatives existent. Cette note présente brièvement les travaux des chercheurs du département SAE2 sur deux alternatives à l’actualisation. Le critère de Chichil