Strategic information acquisition and the mitigation of global warming

We consider the strategic role of uncertainty and information acquisition for the mitigation of global warming which is modeled using a standard framework for private provision of a public good. Prior to the voluntary contribution mechanism, we allow for investments in information about the country-speci…c bene…t of reductions of the emissions of greenhouse gases. We show that information acquisition has a substantial strategic value in the following interaction. Countries may prefer not to learn their valuation of the public good even if information acquisition does not involve a direct cost. This strategic information choice may further decrease the e¢ ciency of the public good provision. Keywords: Private provision of public goods; Environmental public goods; Information acquisition; Uncertainty; Global warming JEL classi…cation: H41; D83; Q54 Correspondence address: Social Science Research Center Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany. Phone: +49-30-25491-409. Fax: +49-30-25491-400. E-mail: [email protected]. I thank Benny Geys, Johannes Münster, Julio Robledo, and, in particular, Kai Konrad for valuable comments and suggestions. Financial support by the German Science Foundation (DFG) through grant SFB/TR 15 is gratefully acknowledged.