|Title||Minimum Participation Rules with Heterogeneous Countries|
|Author(s)||Weikard, Hans Peter; Wangler, Leo; Freytag, Andreas|
|Source||Environmental and Resource Economics 62 (2015)4. - ISSN 0924-6460 - p. 711 - 727.|
Environmental Economics and Natural Resources Group
|Publication type||Refereed Article in a scientific journal|
|Keyword(s)||Coalition formation - Environmental policy coordination - International environmental agreements - Minimum participation rules - Transboundary pollution|
Almost all international environmental agreements include a minimum participation rule. Under such rule an agreement becomes legally binding if and only if a certain threshold in terms of membership or contribution is reached. We analyse a cartel game with open membership and heterogeneous countries to study the endogenous choice of a minimum participation rule and its role for the success of international environmental agreements. While a full participation requirement would be efficient, we find (sequential) equilibria with a minimum participation rule that allows at least one country to free ride. Free riding may occur if a country can exploit some bargaining power in the negotiation of the minimum participation rule.