@article{MielkeSteudle2018,
  author    = {Mielke, Jahel and Steudle, Gesine A.},
  title     = {Green investment and coordination failure},
  series = {Ecological economics},
  volume    = {150},
  journal   = {Ecological economics},
  publisher = {Elsevier},
  address   = {Amsterdam},
  issn      = {0921-8009},
  doi       = {10.1016/j.ecolecon.2018.03.018},
  pages     = {88 -- 95},
  year      = {2018},
  abstract  = {To achieve the goal of keeping global warming well below 2 °C, private investors have to shift capital from brown to green infrastructures and technologies and provide additional green investment. In this paper, we present a game-theoretic perspective on the challenge of triggering such investments. The question of climate change mitigation is often related to the prisoner's dilemma, a game with one Nash equilibrium. However, the authors perceive investment for mitigation and adaptation as a coordination problem of selecting among multiple equilibria. To illustrate this, we model a non-cooperative coordination game, related to the stag hunt, with a brown equilibrium with lower payoffs that can be achieved single-handedly and a green equilibrium with higher payoffs that requires coordination. As multiple experiments show, in such games actors often fail to coordinate on a payoff dominant equilibrium due to uncertainty. Thus, we discuss how uncertainty could be reduced along two options: one that concerns a change in the payoff structure of the game and another that concerns subjective probabilities.},
  language  = {en}
}