This paper analyses the formation of international environmental agreements (IEAs) under uncertainty, focusing on the role of learning and risk aversion. It bridges two strands of literature: one focused on the role learning for the success of IEA formation when countries are risk neutral and...

The paper examines the welfare properties of rational learning by privately informed risk-neutral firms. It is shown that the market solution is inefficient, with firms putting too much weight on their private information and public information therefore accumulating suboptimally slowly. It...