Seminario Governance on Multiple Global Public Goods

Abstract

How does the introduction of a second public good affect incentives for global cooperation? We address this question within a non-cooperative coalition formation game with n symmetric players. We consider two types of agreements: a partial agreement, in which signatories cooperate on only one public good, and a full agreement, in which cooperation extends to both goods. When the two public goods are independent or strategic substitutes, stable coalitions remain small and the gains from cooperation are limited. In contrast, if the goods are strategic complements, the grand coalition can be both stable and effective. This outcome is possible under both partial and full agreement; however, the full agreement leads to stable coalitions much more frequently and generate substantially larger welfare gains.