Essays on the Economics of International Environmental Transfers
There are few examples of international cooperation supported by side payments from victim nations even over unidirectional pollution. Chapter 4 presents a possible explanation for a difficulty in promptly attaining cooperation by exploring the consequence of information asymmetry concerning the damage costs within a polluter country. We find that it can often be in a victim country's interest to postpone providing a side payment in order to induce the revelation of this private information from the polluter country. Our numerical exercise suggests potential factors that could contribute to the occurrence of such strategic delay.
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign