In his seminal paper Barrett (1994) argued that international environmental agreements (IEAs) are typical not successful, which he coined “the paradox of cooperation”. Either self-enforcing IEAs are small and, hence, cannot achieve much or, if they are large, then the gains from cooperation are small. This message has been reiterated by several subsequent papers by and large. However, the determination of stable agreements and their evaluation have been predominantly derived for specific payoff functions and many conclusions are based on simulations. In this paper, we provide analytically solutions for the size of stable agreements, the paradox of cooperation and the underlying forces. Many of our results are a generalization of papers by Diamantoudi and Sartzetakis (2006), Rubio and Ulph (2006) and the recent paper by McGinty (2020).
In his seminal paper Barrett (1994) argued that international environmental agreements (IEAs) are typical not successful, which he coined “the paradox of cooperation”. Either self-enforcing IEAs are small and, hence, cannot achieve much or, if they are large, then the gains from cooperation are small. This message has been reiterated by several subsequent papers by and large. However, the determination of stable agreements and their evaluation have been predominantly derived for specific payoff functions and many conclusions are based on simulations. In this paper, we provide analytically solutions for the size of stable agreements, the paradox of cooperation and the underlying forces. Many of our results are a generalization of papers by Diamantoudi and Sartzetakis (2006), Rubio and Ulph (2006) and the recent paper by McGinty (2020).