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Comparison of different Stackelberg solutions in a deterministic dynamic pollution control: the time inconsistency problem revisited

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  • Thomas Vallée

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

In this paper, we study the two well-known supposed consequences of time inconsistency: the subopti-mality of the time consistent solution, and the assuming increase of the follower's cost. To achieve such a goal, we study different dynamic Stackelberg solutions within a pollution control problem framework. This study is made under the assumption of different information structures, mainly we assume open-loop, feedback and closed-loop structures of information. Some of the numerical results may appear counterintuitive. Hence, there may exist some situations where a time consistent solution is optimal in comparison of the time inconsistent one. Moreover, the perfect discretionary solution may be beneficial to everyone.

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  • Thomas Vallée, 2018. "Comparison of different Stackelberg solutions in a deterministic dynamic pollution control: the time inconsistency problem revisited," Working Papers halshs-01843717, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01843717
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01843717
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    1. Amitrajeet Batabyal, 1996. "Consistency and optimality in a dynamic game of pollution control I: Competition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(2), pages 205-220, September.
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    Keywords

    Time inconsistency; Dynamic Stackelberg game; Pollution control; Incohérence temporelle; Jeux de Stackelberg Dynamique; Contrôle de la pollution;
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