Unilateral actions, the case of international environmental problems

When abatement costs are uncertain but correlated, and a country becomes privately informed that costs are low, then unilateral actions can serve as a signalling device to reveal low costs and this can have the potential to trigger positive responses abroad. However, the country engaging in unilateral actions is the one with the highest expectation about the other countries’ reactions, and it might suffer from an effect similar to the winner’s curse.