Abstract

One remarkable feature of transboundary environmental problems is that there is no organization with supranational power to control anthropogenic pollutants. Hence international cooperation is essential to developing measures to protect the environment. We consider matching schemes as a model for international environmental agreements, and investigate their effectiveness in the game theoretic framework. In the first stage, after the rule of matching scheme is announced, each country simultaneously determines whether to accede to the agreement. In the second stage, it determines a flat abatement noncooperatively. Each signatory is imposed an additional abatement that depends on all countries’ flat abatements. The analysis of a matching game with asymmetric countries as players suggests the existence of a self-enforcing agreement leading to an efficient outcome, and thus shows that matching schemes are effective. For the current situation that it is difficult to prevent free-riding in international environmental agreements, the idea of matching could give us some clue.