A game-theoretic approach for pollution control initiatives

Alireza Tajbakhsh and Elkafi Hassini

International Journal of Production Economics, 2022, vol. 254, issue C

Abstract: There are numerous regional, national, and international efforts to establish mechanisms to curb pollution and emissions. In this paper, we mainly focus on emissions trading systems. Using a static Cournot oligopoly game, we investigate a multi-product multi-pollutant market in which several supply chains compete in a non-cooperative manner in their product markets. This study characterizes conditions under which an efficient solution procedure converges to the unique Nash equilibrium of the oligopoly. Meanwhile, its partners establish a cooperative triopoly game within each supply chain in a nonsuperadditive characteristic function form. Drawing on the cooperative game theory literature, we provide a closed-form solution for a rational distribution of joint rewards between the supply chain’s partners.

Keywords: Environmental legislations; Emissions trading system; Game theory applications; Supply chain management (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:254:y:2022:i:c:s092552732200233x

DOI: 10.1016/j.ijpe.2022.108651

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