Climate Change in a Public Goods Game: Investment Decision in Mitigation versus Adaptation

Reviva Hasson (), Åsa Löfgren and Martine Visser
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Reviva Hasson: Department of Economics, Faculty of Commerce, University of Cape Town, Postal: Private Bag, Rondebosch, 7701, South Africa

No 416, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We use behavioral and experimental economics to study a particular aspect of the economics of climate change: the potential tradeoff between countries’ investments in mitigation versus adaptation. While mitigation of greenhouse gases can be viewed as a public good, adaptation to climate change is a private good, benefiting only the country or the individual that invests in adaptation. We use a one-shot public-goods game that deviates from the standard public-goods game by introducing a stochastic term to account for probabilistic destruction in a climate-change setting. Probability density function is mapped to within-group levels of mitigation. We compare low-vulnerability and high-vulnerability treatments by varying the magnitude of disaster across treatments. Our results show that there is no significant difference in the level of mitigation across these treatments. Further, our results emphasize the important role of trust in enhancing cooperation.

Keywords: Public good; climate change; mitigation; adaptation; experiment; risk (search for similar items in EconPapers)
JEL-codes: D03 H41 Q54 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2009-12-08
New Economics Papers: this item is included in nep-ene, nep-env, nep-exp, nep-gth and nep-pbe
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Climate change in a public goods game: Investment decision in mitigation versus adaptation (2010)
Working Paper: Climate Change in a Public Goods Game: Investment Decision in Mitigation versus Adaptation (2009)
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