Tuomas Laiho, UiO: Information Acquisition in Common Pool Problems
Department seminar. Tuomas Laiho is an Assistant Professor at the University of Oslo. He will present a paper entitled "Information Acquisition in Common Pool Problems", co-authored by Olli-Pekka Kuusela.
The effects of climate change are notoriously hard to estimate and generate a lot of research. With this in mind, we analyze a common pool game with uncertain damages from pollution and an information acquisition stage. Central to our model is that the signals countries acquire are public. We identify the correlation between countries’ damages as a key factor for information acquisition decisions. When correlation is small enough, we show that countries can acquire too much information compared to the cooperative solution. Interestingly, the more inefficient the pollution stage is, the more the noncooperative countries tend to overinvest. In addition, we show that if countries could cooperate on information acquisition before polluting, they might well agree to acquire no information at all.