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In recent years, the problem of coalition formation has attracted the attention of game theorists and economists. In particular, a new approach has emerged in which coalition formation is the outcome of a non-cooperative strategic behaviour of the players involved in the negotiations. This approach has been proposed both in games without spillovers (Le Breton and Weber, 1993) and in games with positive or negative spillovers (Bloch, 1994; Carraro and Siniscalco, 1993). ¹

Among the games in which negative spillovers (or externalities) play a crucial role, there are those which describe the negotiation process leading to international environmental agreements. For example, an international environmental agreement is a coalition formed by those countries which decide to cooperate to reduce their own carbon dioxide emissions. The literature on environmental negotiations (for example, Barrett, 1994; Carraro and Siniscalco, 1993) has emphasized the importance of modelling the decision process through which countries decide to join an environmental coalition as a non cooperative game. The goal is to determine the so-called'self-enforcing agreements', that is agreements which are not based on the countries' commitment to cooperation. 2 The game is therefore a two-stage game: in the first stage, countries decide noncooperatively whether or not to sign the agreement (join the coalition) given the burden-sharing rule which is adopted by the signatory countries; in the second stage, countries set their emission levels (their environmental policy) by maximizing their welfare function given the decision taken in the first stage and the adopted burden …