Publication
Sep 2011
Recent research has shown that agreements centered on the adoption of breakthrough technologies can break the deadlock in international climate negotiations if the mitigation technology exhibits a network externality that transforms full cooperation into a self-enforcing outcome. This paper shows that the same externality also increases strategic uncertainty about future technology adoption, which makes coordination on the cooperative outcome more demanding. The authors analyze this coordination problem in a dynamic game of technology adoption with convex switching costs and find that the adoption dynamics for some technologies depend exclusively on countries' expectations about future adoption.
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English (PDF, 30 pages, 438 KB) |
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Author | Daiju Narita, Ulrich J Wagner |
Series | Kiel Institute Working Papers |
Issue | 1732 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2011 Kiel Institute for the World Economy |