Modeling international climate change negotiations more responsibly: Can highly simplified game theory models provide reliable policy insights?

Abstract: In a recent article in this journal entitled “Game Theory and Climate Diplomacy”, DeCanio and Fremstad (2013) provide an interesting treatment of a range of simple game theoretic characterizations of international climate negotiations. The authors use the Nash and Maxi-min stability definitions to analyze 25 two-by-two ordinal games, which they recognize as “possible game-theoretic characterizations of climate negotiations between two players (e.g., Great Powers or coalitions of states)”. The authors' main conclusion that the Prisoner's Dilemma might not be the best description of climate negotiations game is consistent with the findings of others who have studied two-by-two conflicts over natural commons (Bardhan, 1993; Madani, 2010; Sandler, 1992; Taylor, 1987). Nevertheless, given the importance of the climate change issue, as well as the potential effects of our actions on the state of the environment and the well-being of future generations, I would like to address some gaps in their analysis, which result in it having limited usefulness for policy purposes. Of course, all models are simplified representations of reality, full of limitations. “Essentially, all models are wrong, but some are useful” (Box and Draper, 1987). So, “the practical question is how wrong do they have to be to not be useful” (Box and Draper, 1987). Models' limitations need to be carefully considered when interpreting them or applying their results to policy but some models are too simple to provide useful policy advice. [Copyright &y& Elsevier]