Essays on the Theory of Environmental Coalitions

This thesis consists of two essays. In the first essay, we analyze a two-stage game, with coalition formation in the first stage and Cournot oligopoly in the second, to show how coalition formation takes place and affects the environmental level.In open membership games with symmetric players, the coalition formation process fails, so that the players act independently. In coalition unanimity games with symmetric players, the resulting coalition is the grand coalition, which maximizes the environmental level and improves social welfare compared to the case with open membership.In games with asymmetric players, we analyze coalition formation with and without an endogenous transfer scheme. In the game with a transfer scheme we show that it is possible to achieve a larger coalition than in the game without transfers. For a simple case we explicitly characterize the transfers and their effects on the coalition size.In the second essay, we analyze a dynamic coalition formation game for the provision of a public good, which will be provided only when a certain number of contributions are made. In cinite horizon games, we specify the exact period in which the public good will be provided under subgame-perfect equilibria and show that for some costs there will be a delay in provision of the public good. The length of a delay is not monotonic in terms of costs. In infinite horizon games, we show that the immediate provision of a public good can be achieved in some subgame-perfect equilibria, but there might be delay under some other equilibria. We also introduce a partial public good, which requires fewer contributions to be provided but has a smaller value. We show that for some costs, introducing the partial public good eliminates the possibility of provision of any kind of public good in both finite and infinite horizon games. For other costs, introducing the partial public good may improve social welfare.