Optimal coalition splitting with heterogenous strategies

Raouf Boucekkine (), Carmen Camacho (), Weihua Ruan () and Benteng Zou
Additional contact information
Carmen Camacho: Paris School of Economics & CNRS
Weihua Ruan: Purdue University Northwest

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We consider a group of players initially members of a coalition managing cooperatively a public bad, in this case, the stock of pollution. Countries are technologically heterogeneous but the pollution damage is uniform. We essentially attempt to characterize the conditions under which a country may eventually split and when it splits within an infinite horizon multi-stage differential game. In contrast to the existing literature, we do not assume that after splitting, the splitting player and the remaining coalition will adopt Markovian strategies. Instead, we assume that the latter will remain committed to the collective control of pollution and play open-loop, while the splitting player plays Markovian. Within a full linear-quadratic model, we characterize the optimal strategies. We later compare with the outcomes of the case where the splitting player and the \remaining" coalition play both Markovian. We highlight several interesting results in terms of the implications for long- term pollution levels and the duration of coalitions with heterogenous strategies.

Keywords: Coalition splitting; environmental agreements; differential games; multistage optimal control, precommitment vs Markovian. (search for similar items in EconPapers)
JEL-codes: C61 C73 D71 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-cdm, nep-ene, nep-env and nep-gth
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10993/52314 (application/pdf)

Related works:
Working Paper: Optimal coalition splitting with heterogenous strategies (2023)
Working Paper: Optimal coalition splitting with heterogenous strategies (2023)
Working Paper: Optimal coalition splitting with heterogenous strategies (2022)
Working Paper: Optimal coalition splitting with heterogenous strategies (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:22-13

Access Statistics for this paper

More papers in DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Marina Legrand ().