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PRODID:https://www.diw.de/de/diw_01.c.806339.de/veranstaltungen.html
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UID:diw_01.c.1001489.en
LOCATION:Karl Popper Room,DIW Berlin,2.3.020,Anton-Wilhelm-Amo-Strasse 58,10117 Berlin
SUMMARY:Fehr–Schmidt Inequality Aversion in the RICE Integrated Assessment Model 
DESCRIPTION:13.00 - 14.00 cet. // Standard IAMs typically use CRRA welfare, where a single curvature parameter jointly governs intergenerational weighting and interregional equity, so comparative statics in “inequality aversion” necessarily change discounting. I implement Fehr–Schmidt (FS) inequality aversion in the RICE model to separate directional interregional equity (envy and guilt) from intergenerational weighting, with an optional discounting adjustment that matches CRRA one-period welfare weights. This separation changes predictions. In cooperative solutions, stronger interregional inequality aversion shifts mitigation burdens toward richer regions (under FS, even with Negishi weights). For total abatement, FS can generate a non-monotonic temperature response once rich regions reach full abatement, whereas under CRRA the response to higher curvature is dominated by steeper intergenerational weighting and therefore lower aggregate mitigation. In noncooperative Nash equilibria, the direction of equity concerns matters: Guilt raises abatement whereas envy lowers it. In a climate coalition game, FS preferences admit a fully stable coalition with substantial participation in one specification, while under CRRA no coalition larger than two regions is internally stable.
DTSTART:20260409T110000Z
DTEND:20260409T120000Z
DTSTAMP:20260107T230000Z
URL:https://www.diw.de/en/diw_01.c.1001489.en/events/fehr___schmidt_inequality_aversion_in_the_rice_integrated_assessment_model.html
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