Differential Game Approach for International Environmental Agreements with Social Externalities
Differential Game Approach for International Environmental Agreements with Social Externalities
Author(s): Lina Mallozzi, Stefano Patrì, Armando SaccoSubject(s): Economy, Energy and Environmental Studies, Socio-Economic Research
Published by: Univerzita Karlova v Praze - Institut ekonomických studií
Keywords: Differential game; self-enforcing agreement; social externality; asymmetric Players;
Summary/Abstract: In this work we study an N-player differential game, in which positive social externalities affect the payoffs of the players when they make an agreement. We divide the N players in two homogeneous groups, N1 developed countries and N2 developing countries. For the latter, we consider a damage-cost function that evolves in time. We imagine the externalities as the possibility that bilateral or multilateral agreements of various nature are by-products of an International Environmental Agreement (IEA). After the determination of emissions solutions, we use the externalities to investigate whether it is possible to have a self-enforcing agreement on pollution emissions in the short run.
Journal: Czech Economic Review
- Issue Year: 9/2015
- Issue No: 03
- Page Range: 135-154
- Page Count: 20
- Language: English