Climate treaties with reciprocal preferences
The project develops a simplified theoretical analysis of participation in international environmental agreements if countries behave as if they have reciprocal preferences, i.e., a preference to repay mean intentions by mean actions and kind intentions by kind actions. It is shown that when few others are expected to abate, reciprocal countries are even less willing to abate than countries with standard preferences. However, if all countries have strong preferences for reciprocity, the grand coalition of all countries can be stable as well. The reason is that others' abatement increases the individual country's motivation to contribute. Moreover, if not all countries are reciprocal, a large (but less than full) coalition can be stable if the share of reciprocal countries is strictly more than half, and if these countries are sufficiently strongly reciprocal. In addition, there can exist a stable minority coalition which is larger than the maximum coalition size with standard preferences. In this situation, each coalition member is disappointed with others' behavior and is willing to sacrifice own material welfare to punish them. In spite of this, the minority coalition is stable, for the following reason: Each coalition member knows that if it leaves, the coalition will dissolve. It will then choose to stay, because this is the only way it can keep a small island of kindness in a world of meanness; if it leaves, the world becomes universally mean.
The project also uses laboratory experiments to explore the conditions for parties’ willingness to cooperate in contributing to public goods. Two ongoing sub-projects explore this.
Sufficiently strong reciprocity can lead to conditional cooperation, i.e., parties’ willingness to cooperate is increasing in others’ cooperation. Lab experiment I shows that self-selection into different group types, combined with the dynamic interplay between conditional cooperators, unconditional contributors, and free-riders, result in significant and increasing contribution differences between groups.
Lab experiment II explores the role of strategic ignorance. Previous international studies have established an apparently robust result that when given the opportunity, a large share of subjects choose to avoid getting information about potentially troublesome consequences of their actions for others. Such strategic ignorance typically reduce actual contributions. We study whether strategic ignorance reduces subjects’ contributions to climate projects; if so, whether an impartial observer is willing to provide the unwanted information; and finally, whether fear of social sanctions prevent the observer from providing subjects with the unwanted information.