IDEAS home Printed from https://ideas.repec.org/a/eee/dyncon/v35y2011i6p935-946.html
   My bibliography  Save this article

Buying cooperation in an asymmetric environmental differential game

Author

Listed:
  • Smala Fanokoa, Pascaux
  • Telahigue, Issam
  • Zaccour, Georges

Abstract

We consider a two-player asymmetric differential game of pollution control. One player is non-vulnerable to pollution, or unwilling to consider damages when choosing her production policy in a non-cooperative game. We characterize the feedback-Nash equilibrium and the cooperative solution. We establish conditions under which the vulnerable player can buy the cooperation of the non-vulnerable player to control her emissions. We further use the Nash bargaining solution to allocate the total cooperative dividend between the two players and propose a time-consistent decomposition overtime of the total payoff.

Suggested Citation

  • Smala Fanokoa, Pascaux & Telahigue, Issam & Zaccour, Georges, 2011. "Buying cooperation in an asymmetric environmental differential game," Journal of Economic Dynamics and Control, Elsevier, vol. 35(6), pages 935-946, June.
    • Handle: RePEc:eee:dyncon:v:35:y:2011:i:6:p:935-946
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165-1889(10)00255-1
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Karl-Göran Mäler & Aart De Zeeuw, 1998. "The Acid Rain Differential Game," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(2), pages 167-184, September.
    2. Veijo Kaitala & Matti Pohjola & Olli Tahvonen, 1992. "Transboundary air pollution and soil acidification: A dynamic analysis of an acid rain game between Finland and the USSR," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 161-181, March.
    3. Marc Germain & Philippe Toint & Henry Tulkens & Aart Zeeuw, 2006. "Transfers to Sustain Dynamic Core-Theoretic Cooperation in International Stock Pollutant Control," Springer Books, in: Parkash Chander & Jacques Drèze & C. Knox Lovell & Jack Mintz (ed.), Public goods, environmental externalities and fiscal competition, chapter 0, pages 251-274, Springer.
    4. de Zeeuw, A.J., 1998. "The acid rain differential game," Other publications TiSEM f6c561bf-c603-4de7-994c-e, Tilburg University, School of Economics and Management.
    5. Haurie, Alain & Pohjola, Matti, 1987. "Efficient equilibria in a differential game of capitalism," Journal of Economic Dynamics and Control, Elsevier, vol. 11(1), pages 65-78, March.
    6. Petrosjan, Leon & Zaccour, Georges, 2003. "Time-consistent Shapley value allocation of pollution cost reduction," Journal of Economic Dynamics and Control, Elsevier, vol. 27(3), pages 381-398, January.
    7. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    8. Jorgensen, Steffen & Zaccour, Georges, 2001. "Time consistent side payments in a dynamic game of downstream pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1973-1987, December.
    9. D. W. K. Yeung, 2007. "Dynamically Consistent Cooperative Solution in a Differential Game of Transboundary Industrial Pollution," Journal of Optimization Theory and Applications, Springer, vol. 134(1), pages 143-160, July.
    10. Kaitala, Veijo & Pohjola, Matti, 1990. "Economic Development and Agreeable Redistribution in Capitalism: Efficient Game Equilibria in a Two-Class Neoclassical Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 421-438, May.
    11. repec:bla:scandj:v:97:y:1995:i:2:p:325-43 is not listed on IDEAS
    12. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, January.
    13. Kaitala, V. & Mäler, K.-G. & Tulkens, H., 1995. "The acid rain game as a resource allocation process with an application to the international cooperation among Finland, Russia and Estonia," LIDAM Reprints CORE 1150, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. repec:bla:scandj:v:94:y:1992:i:3:p:409-24 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bréchet, Thierry & Hritonenko, Natali & Yatsenko, Yuri, 2016. "Domestic environmental policy and international cooperation for global commons," Resource and Energy Economics, Elsevier, vol. 44(C), pages 183-205.
    2. Francisco Cabo & Mabel Tidball, 2022. "Cooperation in a Dynamic Setting with Asymmetric Environmental Valuation and Responsibility," Dynamic Games and Applications, Springer, vol. 12(3), pages 844-871, September.
    3. Hao Xu & Deqing Tan, 2023. "Optimal Abatement Technology Licensing in a Dynamic Transboundary Pollution Game: Fixed Fee Versus Royalty," Computational Economics, Springer;Society for Computational Economics, vol. 61(3), pages 905-935, March.
    4. Siciliani, Luigi & Rune Straume, Odd & Cellini, Roberto, 2013. "Quality competition with motivated providers and sluggish demand," Journal of Economic Dynamics and Control, Elsevier, vol. 37(10), pages 2041-2061.
    5. Voss, Achim & Schopf, Mark, 2021. "Lobbying over exhaustible-resource extraction," European Economic Review, Elsevier, vol. 135(C).
    6. Yiwen Chen & Nora Paulus & Xi Wan & Benteng Zou, 2024. "To Deploy or Not to Deploy CCS Abatement, and When : A Differential Game Perspective," DEM Discussion Paper Series 24-07, Department of Economics at the University of Luxembourg.
    7. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    8. Yuankan Huang & Takehiro Inohara, 2023. "Stable Markov perfect equilibria in the asymmetric differential-game duopoly with a renewable resource," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 45-63, April.
    9. Jiayi Sun & Deqing Tan, 2023. "Non-cooperative Mode, Cost-Sharing Mode, or Cooperative Mode: Which is the Optimal Mode for Desertification Control?," Computational Economics, Springer;Society for Computational Economics, vol. 61(3), pages 975-1008, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sedakov, Artem & Qiao, Han & Wang, Shouyang, 2021. "A model of river pollution as a dynamic game with network externalities," European Journal of Operational Research, Elsevier, vol. 290(3), pages 1136-1153.
    2. Javier Frutos & Guiomar Martín-Herrán, 2015. "Does Flexibility Facilitate Sustainability of Cooperation Over Time? A Case Study from Environmental Economics," Journal of Optimization Theory and Applications, Springer, vol. 165(2), pages 657-677, May.
    3. Guennady Ougolnitsky, 2014. "Game theoretic formalization of the concept of sustainable development in the hierarchical control systems," Annals of Operations Research, Springer, vol. 220(1), pages 69-86, September.
    4. Li, Huiquan & Guo, Genlong, 2019. "A differential game analysis of multipollutant transboundary pollution in river basin," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 535(C).
    5. Shoude Li, 2014. "A Differential Game of Transboundary Industrial Pollution with Emission Permits Trading," Journal of Optimization Theory and Applications, Springer, vol. 163(2), pages 642-659, November.
    6. Benchekroun, Hassan & Ray Chaudhuri, Amrita, 2011. "Environmental policy and stable collusion: The case of a dynamic polluting oligopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 479-490, April.
    7. Calvo, Emilio & Rubio, Santiago J., 2013. "Dynamic Models of International Environmental Agreements: A Differential Game Approach," International Review of Environmental and Resource Economics, now publishers, vol. 6(4), pages 289-339, April.
    8. N. Baris Vardar & Georges Zaccour, 2020. "Exploitation of a Productive Asset in the Presence of Strategic Behavior and Pollution Externalities," Mathematics, MDPI, vol. 8(10), pages 1-28, October.
    9. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    10. GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry & DE ZEEUW, Aart, 1998. "Transfers to sustain core-theoretic cooperation in international stock pollutant control," LIDAM Discussion Papers CORE 1998032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    12. Lassi Ahlvik & Yulia Pavlova, 2013. "A Strategic Analysis of Eutrophication Abatement in the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 353-378, November.
    13. Shuhua Chang & Suresh P. Sethi & Xinyu Wang, 2018. "Optimal Abatement and Emission Permit Trading Policies in a Dynamic Transboundary Pollution Game," Dynamic Games and Applications, Springer, vol. 8(3), pages 542-572, September.
    14. M. Breton & G. Martín-Herrán & G. Zaccour, 2006. "Equilibrium Investment Strategies in Foreign Environmental Projects," Journal of Optimization Theory and Applications, Springer, vol. 130(1), pages 23-40, July.
    15. Colombo, Luca & Labrecciosa, Paola, 2018. "Consumer surplus-enhancing cooperation in a natural resource oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 185-193.
    16. repec:tiu:tiucen:200880 is not listed on IDEAS
    17. S. Jørgensen & G. Martín-Herrán & G. Zaccour, 2003. "Agreeability and Time Consistency in Linear-State Differential Games," Journal of Optimization Theory and Applications, Springer, vol. 119(1), pages 49-63, October.
    18. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial vs. non-spatial transboundary pollution control in a class of cooperative and non-cooperative dynamic games," European Journal of Operational Research, Elsevier, vol. 276(1), pages 379-394.
    19. Santiago J. Rubio, 2001. "International Cooperation In Pollution Control," Working Papers. Serie AD 2001-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    20. Açıkgöz, Ömer T. & Benchekroun, Hassan, 2017. "Anticipated international environmental agreements," European Economic Review, Elsevier, vol. 92(C), pages 306-336.
    21. Casas, Omar J. & Romera, Rosario, 2011. "The international stock pollutant control: a stochastic formulation with transfers," DES - Working Papers. Statistics and Econometrics. WS ws112217, Universidad Carlos III de Madrid. Departamento de Estadística.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:35:y:2011:i:6:p:935-946. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jedc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.