Käte Hamburger Kolleg / Centre for Global Cooperation Research
Schifferstraße 44
47059 Duisburg
Germany

Tel:  +49 (0)203 29861-102
Fax: +49 (0)203 379-5276
E-mail: hovi@spam protectgcr21.uni-due.de

Credible Commitments to Long-term Policy

We study the conditions under which governments might be able to commit to a long-term policy such as a policy to reduce the emissions of greenhouse gases. In particular, we wish to study how the prospects that elections in one or more countries participating in a climate agreement might influence these countries' implementation of their long-term commitments under this agreement. As part of this effort, we plan to conduct a lab experiment based on the Centipede game (Binmore 1987; Aumann 1988; Morton 2007).

In this game, two players take turns in making decisions. At each decision node, one of the players must decide whether to continue or discontinue the game. A central characteristic of the game is that the longer the two players continue the game, the larger the players' payoffs. However, at each decision node, discontinuing the game is the individually rational option. Hence, the unique subgame-perfect equilibrium is that the player making the first move discontinues the game immediately.

However, as is also the case for many other cooperation games, the behavior predicted by the subgame-perfect equilibrium is typically not borne out in lab experiments. Instead, players often continue the game for several moves (or even to the end) and thereby achieve collectively better outcomes than in the subgame-perfect equilibrium (McKelvey and Palfrey 1992).

We will conduct an experiment that introduces a novel variant of the Centipede game. Before the final move, an election is held in one of the countries. The outcome of this election can either be 'green' (meaning that the current government is reelected and continues to reduce emissions) or 'brown' (meaning that a less climate-friendly government takes over and climate change mitigation comes to a halt). If the outcome of the election is brown, then the temptation to discontinue the game (withdraw from the climate agreement) will become large, whereas if the outcome is green, then this temptation remains moderate. Moreover, in our experiment the probability of a brown election outcome is either moderate (0.4) or significant (0.6). We will study experimentally how this modification of the Centipede game influences the outcome. A core hypothesis is that the players will be most likely to discontinue the game early if there is a significant probability of a brown outcome and the temptation to discontinue after a brown outcome is large. In contrast, they will be less likely to discontinue early if there is only a moderate probability of a brown outcome and the temptation to discontinue after a brown outcome is moderate.

In addition, we will also study experimentally how trust may influence the outcome. By increasing the number of decisions made before the election takes place, subjects have the opportunity to acquire more information about their opponents and to build trust through cooperative behavior. We hypothesize that a longer horizon (and thus an increased chance to build trust) will reduce the probability of discontinuing the game both before and after the election, even when the temptation to discontinue is high (i.e., even when the outcome of the election is brown).

Our experiments will use instructions that follow – as far as possible – those used by Palacios-Huerta and Volij (2009). Given the benchmarks of the standard Centipede game (McKelvey and Palfrey 1992), we innovate on the current state of knowledge by introducing an election component that entails uncertainty concerning payoffs. Our experiments aim to demonstrate whether and to what degree this innovative component will cause our results to deviate from those of previous Centipede-game experiments.

• Credible Commitment to Long-term Policy
• The Club Approach to International Climate Cooperation
• Why does the US Senate provide its advice and consent more quickly for some treaties than for others?

Hovi, Jon, and Skodvin, Tora (guest eds.) (2016): 'Climate Governance and the Paris Agreement', Politics and Governance 4 (3): 111–223 (Thematic Issue).

Aakre, Stine, Helland, Leif, and Hovi, Jon (2016): 'When Does Informal Enforcement Work?', Journal of Conflict Resolution 60 (7): 1312–40 .

Hovi, Jon, Ward,  Hugh, and Grundig, Frank (2015): 'Hope or Despair? Formal Models of Climate Cooperation', Environmental and Resource Economics 62 (4): 665–88.

Hvidsten, Andreas, and Hovi,  Jon (2015): 'Why No Twin-track Europe? Unity, Discontent and Differentiation in European Integration', European Union Politics 16 (1): 3–22.

Cherry, Todd L., Hovi, Jon, and McEvoy, David M. (eds.) (2014): Toward a New Climate Agreement. Conflict, Resolution and Governance, London/New York: Routledge.

Hovi, Jon, Skodvin, Tora, and Aakre, Stine (2013): 'Can Climate Negotiations Succeed?', Politics and Governance 1 (2): 138–50.

Hovi, Jon et al. (2012): 'Can Conditional Commitments Break the Climate Change Negotiations Deadlock?', International Political Science Review 33 (4): 475–93 (together with Arild Underdal, Steffen Kallbekken, and Tora Skodvin).

Hovi, Jon, Sprinz, Detlef F., and Bang, Guri (2012): 'Why the United States Did Not Become a Party to the Kyoto Protocol. German, Norwegian and US Perspectives', European Journal of International Relations 18 (1): 129–50.

Hovi, Jon, Froyn, Camilla B., and Bang, Guri (2007): 'Enforcing the Kyoto Protocol: Can Punitive Consequences Restore Compliance?', Review of International Studies 33 (3): 435–49.

Hovi, Jon et al. (2006): 'Regional versus Global Cooperation for Climate Control', Journal of Environmental Economics and Management 51 (1): 93–109 (together with Geir B. Asheim, Camilla B. Froyn, and Fredric C. Menz).

Hovi, Jon, Huseby, Robert, and Sprinz, Detlef F. (2005): 'When Do (Imposed) Economic Sanctions Work?', World Politics 57 (4): 479–99.

Hovi, Jon, Sprinz, Detlef F., and Underdal, Arild (2003): 'The Oslo-Potsdam Solution to Measuring Regime Effectiveness: Critique, Response, and the Road Ahead', Global Environmental Politics 3 (3): 74–96.