Provision of a Public Good with Altruistic Overlapping Generations and Many Tribes

• Departmental Seminar
• Environmental and Resource Economics Workshop

Date and Location

Wednesday, April 30, 2014, 4:10 PM - 5:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

I compare the relative importance of intergenerational altruism and contemporaneous cooperation, in determining equilibrium climate policy, by imbedding an OLG framework with intergenerational altruism into a differential game between nations. The model uses new representations for the aggregate preferences of OLGs with paternalistic or pure altruism, and exponentially distributed or deterministic lifetimes. In a linear-in-state model of climate change, the "limit equilibrium" is more sensitive to contemporaneous cooperation than to intergenerational altruism. This comparison also holds in other Markov perfect equilibria if one uses a particular "elasticity criterion", but can be overturned under a more subjective criterion of relative sensitivity.