Why Cooperate

Question 1

Problem of Cooperation

Answer 1

-Actors are selfish
-Anarchy rules
-Can’t establish global government

Question 2

Role of International Regimes

Answer 2

Solution for Cooperation
-Increase shadow of the future
-Increase information
-Monitor state behaviour
-Enforce state compliance

Reduce Transaction Cost
-Search and information costs
-Bargaining costs
-Policing and enforcement costs

Question 3

Transaction Costs and Institutions

Answer 3

Model
When transaction costs low
-simple negotiated agreements

When transaction costs high
-International regimes created

When transaction costs very high
-No cooperation possible

Question 4

Moravcsik’s Criticisms of Transaction Cost Model

Answer 4

Doesn’t really apply everywhere
-Looks at cases where transaction costs were high but institutions still created
-Eg. EU –> High transaction costs and still created institutions

Question 5

Issues with Transaction Costs Model

Answer 5

Gilligan

Selection Bias
-can only observe attempted cooperation, otherwise unobservable

Measurement Issues
-Costs only high in absolute terms
-TCs actually low relative to surplus from cooperation

Regimes with low TCs
-should compare cost to the cost of future negotiation

Question 6

Prisoner’s Dilemma

Answer 6

Characteristics
-Play only once
-Can’t change action once chosen
-Simultaneous
-No communication
-No way to enforce cooperation

Question 7

Dispute Settlement Mechanism

Answer 7

-Imposes a tit-for-tat retaliation system
-ensures reciprocity

Two features of DSM
-Centralization –> dispute settlement body
-Independence –> appellate body and experts

Question 8

Tit-for-Tat

Answer 8

-Unless country 2 defects, country 1 will always cooperate
-If country 2 defects, country 1 will retaliate
-Country 1 is quick to forgive once country 2 rectifies the situation