For a club such as the European Union, an important question is whether a subset of the members should be allowed to form "inner clubs" and enhance cooperation. Flexible cooperation allows members to participate if and only if they benefit, but it leads to free-riding when externalities are...

The paper presents a dynamic game where players contribute to a public bad, invest in technologies, and write incomplete contracts. Despite the n + 1 stocks in the model, the analysis is tractable and the symmetric Markov perfect equilibrium unique. If only the contribution levels are...

Private politics are often introduced by market participants in the absence of public regulation. But when is private politics enough, efficient, or better than administratively costly public regulation? We present a novel framework in which we can study the interaction between regulation,...

This paper explores how a principal with time-inconsistent preferences invests optimally in technology or capital. If the current principal prefers her future self to save more, she can increase current investments complementary to future savings and decrease investments in the strategic...

Bård Harstad received the 2013 Erik Kempe Award for his novel and insightful contribution to the study of international environmental policy in his paper “Buy Coal! A Case for Supply-Side Environmental Policy". In a short video, he explains to Re3 the logics behind his theory, and possibly...

We develop a dynamic game to explore the interaction between regulation and private policies, such as self-regulation by firms and activism. Without a public regulator, the possibility of self-regulation is bad for the firm, but good for activists who are willing to maintain a costly boycott to...

We analyze participation in international environmental agreements (IEAs) in a dynamic game where countries pollute and invest in green technologies. If complete contracts are feasible, participants eliminate the hold-up problem associated with their investments; however, most countries prefer...

This article presents a sequence of simple and related models to analyze the strategic use of natural resources. Game theory is the natural tool for such an analysis, whether the resource is private or publicly owned, whether it is renewable or exhaustible, whether the game is static or dynamic,...

We present a model where heterogeneous districts choose both whether to experiment and the policies to experiment with. Since districts learn from each other, the first-best requires that policy experiments converge so that innovations are useful also for neighbors. However, the equilibrium...

Free-riding is at the core of environmental problems. If a climate coalition reduces its emissions, world prices change and nonparticipants typically emit more; they may also extract the dirtiest type of fossil fuel and invest too little in green technology. The coalition’s second-best policy...