Information Manipulation and Climate Agreements
Fuhai Hong⇑ and Xiaojian Zhao
- Author Affiliations
Fuhai Hong is an assistant professor in the Division of Economics, Nanyang Technological University. Xiaojian Zhao is an assistant professor in the Department of Economics, Hong Kong University of Science and Technology.
Correspondence may be sent to: email@example.com.
The authors thank Larry Karp, Madhu Khanna, Jinhua Zhao, two anonymous referees, and participants in the Conference on Global Environmental Challenges: the Role of China for their helpful comments.
It appears that news media and some pro-environmental organizations have the tendency to accentuate or even exaggerate the damage caused by climate change. This article provides a rationale for this tendency by using a modified International Environmental Agreement (IEA) model with asymmetric information. We find that the information manipulation has an instrumental value, as it ex post induces more countries to participate in an IEA, which will eventually enhance global welfare. From the ex ante perspective, however, the impact that manipulating information has on the level of participation in an IEA and on welfare is ambiguous.
Asymmetric information climate change information transmission international environmental agreements
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