Joint work with Larry S. Karp.
We analyze a dynamic model of international environmental agreements (IEAs) where countries cannot make long-term commitments or use sanctions or rewards to induce cooperation. Countries can communicate with each other to build endogenous beliefs about the random consequences of (re)opening negotiation. If countries are patient, an effective agreement can be reached after a succession of short-lived ineffective agreements. This eventual success requires `sober optimism': the understanding that cooperation is possible but not easy to achieve. Beliefs are important and negotiations matter. Our results help explain heterogeneous outcomes and provide a counterweight to prevailing pessimistic views about the prospects for IEAs.