A taxonomy of global public goods and climate change as a social dilemma

Question 1

What are the four incentives to supply global public goods that were introduced in class? (Scott Barrett 2007)

Answer 1

Single Best Effort
Weakest Link
Aggregate Effort
Coordination

Question 2

What does supply depend on when turning to COORDINATION as a way to supply a global public good?

Answer 2

Countries doing the same thing

Question 3

Is international cooperation needed when turning to COORDINATION as a way to supply a global public good?

Answer 3

Yes, to choose a common standard.

Question 4

Is enforcement of agreement challenging when turning to COORDINATION as a way to supply a global public good?

Answer 4

No, though participation will need to pass a threshold

Question 5

Name an example of COORDINATION as a way to supply a global public good

Answer 5

Standards for the measurement of
time, for oil tankers, and for automobiles.

Question 6

What does supply depend on when turning to AGGREGATE EFFORT as a way to supply a global public good?

Answer 6

The total effort of all countries.

Question 7

Is international cooperation needed when turning to AGGREGATE EFFORT as a way to supply a global public good?

Answer 7

Yes, to determine the
individual actions needed
to achieve an overall
outcome.

Question 8

Is enforcement of agreement challenging when turning to AGGREGATE EFFORT as a way to supply a global public good?

Answer 8

Yes.

Question 9

Name an example of AGGREGATE EFFORT as a way to supply a global public good

Answer 9

Climate change mitigation, ozone layer protection.

Question 10

What does supply depend on when turning to WEAKEST LINK as a way to supply a global public good?

Answer 10

The weakest individual effort.

Question 11

Is international cooperation needed when turning to WEAKEST LINK as a way to supply a global public good?

Answer 11

Yes, to establish universal minimum standards

Question 12

Is enforcement of agreement challenging when turning to WEAKEST LINK as a way to supply a global public good?

Answer 12

Yes, except when provision requires only coordination

Question 13

Name an example of WEAKEST LINK as a way to supply a global public good

Answer 13

Disease eradication
Preventing emergence of resistance and new diseases
Securing nuclear materials

Question 14

What is a main challenge with AGGREGATE EFFORT as a way to supply a global public good

Answer 14

Countries have an incentive to deviate after they have signed the agreement

Question 15

What is a main challenge linked to WEAKEST LINK as a way to supply a global public good?

Answer 15

Trust: if one country does not live up to the agreement, it is all wasted

Question 16

What does supply depend on when turning to SINGLE BEST EFFORT as a way to supply a global public good?

Answer 16

The single best (unilateral or collective) effort.

Question 17

Is international cooperation needed when turning to SINGLE BEST EFFORT as a way to supply a global public good?

Answer 17

Yes, in many cases, to determine what should be done, and which countries should pay.

Question 18

Is enforcement of agreement challenging when turning to SINGLE BEST EFFORT as a way to supply a global public good?

Answer 18

Not normally.

Question 19

Name an example of SINGLE BEST EFFORT as a way to supply a global public good

Answer 19

• Asteroid defense
• Knowledge
• Peacekeeping
• Suppressing an infectious disease outbreak at its source
• Geoengineering

Question 20

What is the socially optimal outcome?

Answer 20

Question 21

For each action of China, what is the best reply for the EU? Compare its personal payoffs given the action of the opponent

Answer 21

Question 22

When is an outcome an equilibrium in general terms?

Answer 22

An outcome is an equilibrium when actions are “compatible” in the sense that nodoby regret their choice after having observed what others have chosen.

There are many concepts of equilibrium,
we use the version proposed by John Nash.

Question 23

When is an outcome a Nash equilibrium?

Answer 23

Question 24

The table represents a game based on aggregate effort. What is the socially optimal outcome and what is the best reply (BR) of the EU if China decides to coorporate?

Answer 24

Question 25

Why is the public good game (=aggregate effort) an instance of a social dilemma?

Answer 25

Because it is a situation where mutual cooperation would improve the payoffs of everyone but there is an individual
incentive to free-ride.

Question 25

Explain the main problem with the public good game (= aggregate effort)

Answer 25

Society is locked into an inefficient situation because each single player has no incentive to cooperate. Even if the others cooperate, it is in the individual self-interest of the player to free-ride.

Question 26

The table represents the weakest link game.
What is the socially optimal outcome?
If China puts in effort, what is the best reply of the EU?
What Nash equilibriums exist in this game?

Answer 26

Question 27

Is one equilibrium in the weakest link game payoff dominant?

Answer 27

Yes, (16,16). It is efficient.

Question 28

Is coordinating on the payoff dominant equilibrium (16,16) in the weakest link game easy?

Answer 28

No, coordinating on the payoff dominant equilibrium can in practice be difficult, despite facing a common interest game and in the absence of incentives to free-ride.

Reaching the outcome exposes players to a strategic risk.

Question 29

What game would be the most suitable for succesful global climate mitigation?

Answer 29

Question 30

The table represents the single best effort game.
What is the socially optimal outcome?
If China puts in effort, what is the best reply of the EU?
What Nash equilibriums exists in the game and are they efficient?

Answer 30