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Public good games in coalitional form, such as the ones depicting international environmental agreements for the reduction of a global pollutant, generally foresee scarce levels of cooperation. The incentive to free ride, that increases for higher levels of cooperation, prevents the formation of stable coalitions. The introduction of other-regarding preferences, in the form of Fehr and Schmidt utility functions, enlarges cooperation, but still at suboptimal levels. The present paper considers a further possibility, namely the introduction of a mechanism through which the contributions of players to the public good are proportional to the average contribution of the other players abiding to the mechanism: proportional contributions. The mechanism is therefore rooted into reciprocity. By applying it to a standard abatement game parameterized on the RICE model, we show that the mechanism is in fact able to increase cooperation both under standard and under F&S preferences. Stability of the grand coalition is never reached, but potential internally stable grand coalitions are achieved under F&S preferences. The attainment of higher cooperation comes at the expense of the level of global abatement that is lower when proportional contributions are in place. Im vorliegenden Papier wird ein reziprozitätsbasierter Beitragsmechanismus in ein Koalitionsspiel zur Bereitstellung eines globalen öffentlichen Gutes - z.B. Klimaschutz - eingeführt. Spieler tragen - wenn sie einer Koalition beitreten - proportional zum durchschnittlichen Beitrag bei. Das Modell wird anhand des RICE-Modells kalibriert. Es zeigt sich, dass der vorgeschlagene Mechanismus tatsächlich die Partizipation an Klimakoalitionen steigern kann, sowohl unter Annahme von Standard-, als auch von Fehr-Schmidt Präferenzen. Jedoch wird unter dem Mechanismus weniger des öffentlichen Gutes bereitgestellt.

Impact assessment models are a tool largely used to investigate the benefit of reducing polluting emissions and limiting the anthropogenic mean temperature rise. However, they have been often criticised for suggesting low levels of abatement. Countries and regions, that are generally the actors in these models, are usually depicted as having standard concave utility functions in consumption. This, however, disregards a potentially important aspect of environmental negotiations, namely its distributive implications. The present paper tries to fill this gap assuming that countries\regions have Fehr and Schmidt (1999) (F&S) utility functions, specifically tailored for including inequality aversion. Thereby, we propose a new method for the empirical estimation of the inequality aversion parameters by establishing a link between the well known concept of elasticity of marginal utility of consumption and the F&S utility functions, accounting for heterogeneity of countries/regions. By adopting the RICE model, we compare its standard results with the ones obtained introducing F&S utility functions, showing that, under optimal cooperation, the level of temperature rise is significantly lower in the last scenario. In particular, in the last year of the simulation, the optimal temperature rise is 2.1° C. Furthermore, it is shown that stable coalitions are easier to be achieved when F&S preferences are assumed, even if the advantageous inequality aversion parameter (altruism) is assumed to have a very low value. However, self-sustaining coalitions are far from reaching the environmental target of limiting the mean temperature rise below 2° C despite the adoption of F&S utility functions. Wir führen Ungleichheitsaversion im Sinne von Fehr und Schmidt (1999) in das RICE Modell von Nordhaus ein. Länder bzw. Regionen des Modells können durch Aversion gegen unvorteilhafte oder auch vorteilhafte Ungleichheit motiviert sein. Zur empirischen Abschätzung der Parameter der Fehr-Schmidt-Nutzenfunktion wird eine Beziehung zum empirisch gut untersuchten Konzept der Elastizität des Grenznutzens hergestellt. Es zeigt sich, dass die Aversion gegen unvorteilhafte Ungleichheit sich invers zum Pro-Kopf-Einkommen verhält, d.h. ärmere Akteure sind durch stärkere Grade der Aversion charakterisiert. Die Simulation des Modells ergibt einen optimalen Temperaturanstieg im Jahr 2100 von 2,1° Celsius im Vergleich zu 2,7° Celsius, die sich im Baseline unter der Annahme von Standardpräferenzen ergeben. Unsere Studie ist daher in der Lage, eine ökonomische Begründung für das Zwei-Grad Ziel des Paris Abkommens zu geben, auch wenn alle übrigen Bedingungen des Nordhaus-Modells, insbesondere die Diskontierungsrate sowie die Grenzschadensfunktion, konstant gehalten werden. Darüber hinaus zeigt sich im Optimalszenario eine weitaus stärkere Differenzierung der Vermeidungslasten: Reiche Länder müssen deutlich mehr vermeiden relativ zum Baseline-Modell, ärmere Länder deutlich weniger. Die Studie untersucht auch die Frage stabiler Koalitionen. Es zeigt sich, dass heterogene Ungleichheitsaversion zu signifikant mehr freiwilliger Kooperation im Klimaschutz führt. Allerdings kann auch im besten Fall eine Sieben-Länder-Koalition den Temperaturanstieg auf lediglich drei Grad begrenzen.

There is a growing interest in analysing the diusion of agricultural insurance, seen as an eective tool for managing farm risks. Much atten- tion has been dedicated to understanding the scarce adoption rate despite high levels of subsidization and policy support. In this paper, we anal- yse an aspect that seems to have been partially overlooked: the potential competing nature between insurance and other risk management tools. We consider hail as a single source weather shock and analyse the po- tential competing eect of anti-hail nets over insurance as instruments to cope with this shock by presenting a simple theoretical model that is rooted into expected utility theory. After describing the basic model, we perform some comparative static analysis to identify the role of individual elements that are shaping farmers' decisions. From this exercise it results that the worth of anti-hail nets compared to insurance is an increasing function of the overall risk of hail damages, of the farmers' level of risk aversion and of the worth of the agricultural output. Finally, we develop a simulation model using data related to apple pro- duction in South Tyrol, a Northern-Italian province with a relatively high risk of hail. The model generally conrms the results of the comparative static analysis and it shows that, in this region, anti-hail nets are often superior than insurance in expected utility terms.

Even when cooperation is clearly advantageous, attaining it is not to be taken for granted. In fact, in order to undertake a mutually beneficial joint activity, the parties must agree on the division of the gains granted by it. The self-interested nature that is supposed to characterize the same parties might then become a serious obstacle to the collectively rational choice of cooperating. Bargaining and Cooperative Game Theory are the two principal frameworks that are used by economists to investigate this puzzling but fascinating problem. In particular, if the latter proposes solutions to hypothetical bargaining problems according to normative principles such as egalitarianism and marginalism, the former examine the same problem from a positive perspective focusing on the relation between the rules of the bargaining process and its outcomes. The present Doctoral Thesis employs both these frameworks in a complementary way. Specifically, it proposes two novel solution concepts for transferable utility games in characteristic function form and a bargaining model whose outcome is exactly one of such solutions. It further compares different solution concepts with regard to their redistributive properties and their resilience to free riding. The Doctoral Thesis is composed by four standing alone, but interlinked, works forming the four chapters in which it is divided. Chapter 1 offers a literature review of bargaining models. Chapter 2 presents the two novel solution concepts: the Central Core and the Mid-central Core. Chapter 3 proposes the Burning Coalition Bargaining Model, a non cooperative bargaining model whose outcome, under a specific response strategy profile, is the Mid-central Core. Finally, Chapter 4 benchmarks different solution concepts through a numerical simulation based on an environmental game.