Bargaining and International Environmental Agreements

This article surveys game theoretic papers focused on the negotiation process that leads to an International Environmental Agreement. Most of the papers considered apply bargaining theory, although other approaches have been considered as well. Among other issues, the papers considered analyze: the burden sharing rule that will result from a negotiation over a global public good; the role of information asymmetries; the impact of unilateral commitments, delegation, and ratification; whether or not countries are going to form groups during the negotiation process; and the influence of the expectation of a future bargaining process on investment decisions. The basic bargaining model is optimistic, as it predicts that countries will reach an efficient agreement immediately. However, all the developments of this model surveyed afterwards are rather pessimistic and even the basic model has perverse incentives for pre-negotiation signals.