Teresa Parrot, Graham Crook's All Love, SKHM Manual PDF

By Teresa Parrot, Graham Crook

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6, where we study the effect of external factors on the actual discount rate, we treat discount factors as parameters. Whenever this is appropriate, we express the effect of a factor on the stability of an IEA as the effect of this factor on the minimum discount factor requirement, though it is certainly possible also to capture this effect in other ways. 1 Credible Sanctions and Incentive-Compatible Compensation Measures Sanctions Though the basic idea of sanctions has been outlined, it remains to clarify what credible sanctions mean in the context of IRGs.

However, whether nonsignatories have an incentive to belong to the coalition is not modeled. This incentive is only captured in so far that a minimum requirement for a country to accede to an IEA is that it receives an individual rational payoff under the agreement. Therefore, we conclude: Conclusion 7 (based on discussion) Repeated games capture the second type of free-rider incentive very well but the first type only partially. The focus of the analysis is on the stability of a particular agreement but not on the membership of IEAs.

Though violations must be punished (otherwise violations pay and stability is jeopardized; see C1 and C3), the violator should have an incentive to remain in the IEA despite the (necessary) punishment (Q. Thus, generally, a trigger strategy which calls upon the suspension of a treaty for ever is not renegotiation-proof. Because of C2, C3 is a stronger requirement than C1. Hence, C1 can be dropped. Condition C4 is particularly important in an international context and ensures that a threat is credible.

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All Love, SKHM Manual by Teresa Parrot, Graham Crook

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