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Cassandra's Curse: A Second Tragedy of the Commons

Colo, Philippe (2021): Cassandra's Curse: A Second Tragedy of the Commons.

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Abstract

This paper studies why scientific forecasts regarding exceptional or rare events generally fail to trigger adequate public response. A major example is climate change: despite years of scientific reporting, public acceptance of economic regulations is still limited. Building on the main causes of such reluctance identified by surveys, this paper offers an explanatory mechanism for this paradox. I consider a game of contribution to a public bad: greenhouse gas emissions. Prior to the game, contributors receive expert advice regarding climate damage. Because of the complexity of climate science, experts' forecasts are non-verifiable. In addition, I assume that the expert cares only about social welfare. Under mild assumptions, I show that no information transmission can happen at equilibrium when the number of contributors is high or the severity of climate damage is low. Then, contributors ignore scientific reports and act solely upon their prior belief.

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