Climate Contracts: A Game of Emissions, Investments, Negotiations, and Renegotiations
构建了一个动态博弈模型，研究参与者如何贡献公共坏、投资技术并签订不完全合约，分析了合约期限和重新谈判对投资激励的影响，为设计气候条约提供启示。
The paper presents a dynamic game where players contribute to a public bad, invest in technologies, and write incomplete contracts. Despite the <it>n</it> + 1 stocks in the model, the analysis is tractable and the symmetric Markov perfect equilibrium unique. If only the contribution levels are contractible, then investments are suboptimally small if the contract is short term or close to its expiration date. To encourage investments, the optimal contract is more ambitious if it is short term, and it is tougher to satisfy close to its expiration date and for players with small investment costs. If renegotiation is possible, such an incomplete contract implements the first-best. The framework helps to analyse emissions, investments, and international environmental agreements, and the results have important lessons for how to design a climate treaty.