The Strategic Role of Self-Defence

Abstract

Self-protection reduces own damages without changing the state of the environment and thus has private good characteristics. In a two-stage problem we consider self-protection as a substitute for abatement which has public good characteristics. We find that self-protection shifts the second stage subgame perfect Nash equilibrium of abatements such that own contributions of abatement are decreased and that of other agents are increased. Thereby it shifts the cost of abatement to other agents. In the semicooperation case, where agents cooperate only on abatement, the incentives to shift abatements are greatest and therefore the optimal choice of self-protection is highest. In the noncooperative case the level of self-protection is lower because the noncooperative choice of abatements absorbs some of the incentives to shift abatement. In the fullcooperation case shifting of abatements have no significance to the social planner and consequently the choice of self-protection is lowest

Published in

Working Paper Series / Swedish University of Agricultural Sciences, Department of Economics
2005, number: 2005:1
Publisher: SLU Department of Economics

SLU Authors

• Zehaie, Ficre

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Economics and Business
Social Sciences
Environmental Sciences and Nature Conservation

Permanent link to this page (URI)

https://res.slu.se/id/publ/7833