A strategic analysis of trade and public environmental goods
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2022-05-10
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Maggi, Giovanni
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As concerns with native forests preservation mount around the globe, free trade deals have gained the spotlight for increasing the incentives to deforestation. This paper shows how two countries, one with native forest and the other without it, use trade tariffs in a non-cooperative infinite horizon game to maximize their welfare functions in a micro founded model with myopic leaders, and shows the shortcomings of an agreement in a finite horizon game.