Unilateral Actions the Case of International Environmental Problems

Table of contents

1. Introduction................................................................................................... 7

2. Model........................................................................................................... 10

3. Cost uncertainty...........................................................................................14

4. Signalling game 1: Incentives to signal that costs are high.........................16

Sequential equilibrium................................................................................. 18

Separating equilibrium................................................................................ 19

5. Information structure and correlation of costs.............................................23

6. The signalling game 2: Incentives to signal that costs are low....................26

7. Relaxing the assumptions............................................................................30

The curse of the initial mover......................................................................31

Alternative specification of the information structure.................................32

8. Conclusions ................................................................................................. 36

9. Literature..................................................................................................... 38

10. Appendixes.................................................................................................. 40