Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7344015 | Ecological Economics | 2018 | 8 Pages |
Abstract
To achieve the goal of keeping global warming well below 2â¯Â°C, private investors have to shift capital from brown to green infrastructures and technologies and provide additional green investment. In this paper, we present a game-theoretic perspective on the challenge of triggering such investments. The question of climate change mitigation is often related to the prisoner's dilemma, a game with one Nash equilibrium. However, the authors perceive investment for mitigation and adaptation as a coordination problem of selecting among multiple equilibria. To illustrate this, we model a non-cooperative coordination game, related to the stag hunt, with a brown equilibrium with lower payoffs that can be achieved single-handedly and a green equilibrium with higher payoffs that requires coordination. As multiple experiments show, in such games actors often fail to coordinate on a payoff dominant equilibrium due to uncertainty. Thus, we discuss how uncertainty could be reduced along two options: one that concerns a change in the payoff structure of the game and another that concerns subjective probabilities.
Related Topics
Life Sciences
Agricultural and Biological Sciences
Ecology, Evolution, Behavior and Systematics
Authors
Jahel Mielke, Gesine A. Steudle,