Associate Professor, Hirao School of Management, Konan University
The greenspace agreement is an effective method to promote the conservation and creation of greenspace. In this paper, the mechanism of the formation of the greenspace agreement is analysed using the coalition game. As a result, it was identified that the greenspace agreement requires a certain level of supporters in order to be formed and the most desirable situation is when there is a universal agreement. It also identified the possibility of the existence of free riders which could prevent a unanimous support of the greenspace agreement. The number of supporters of the greenspace agreement and number of free riders are dependent on the size of the external diseconomy caused by the lack of consideration for greenspace, the government’s enforceability of taxes on the diseconomy and the decline in land prices due to the external diseconomies from the neglect of greenspace. Furthermore, it was found that it was also influenced by the residents and stakeholder’s risk assessment based on their view towards the government’s enforceability of taxes and the rate of decline in land prices.
Keywords: Greenspace agreement, coalition game, free rider, external diseconomy
JEL classification: H2, Q5, R0