Consistency and optimality in a dynamic game of pollution control II: Monopoly

Amitrajeet Batabyal

Environmental & Resource Economics, 1996, vol. 8, issue 3, 315-330

Abstract: This paper continues a line of research begun in Batabyal (1995a). I model the interaction between a regulator and a monopolistic, polluting firm as a Stackelberg differential game in which the regulator leads. The firm creates pollution, which results in a stock externality. I analyze the intertemporal effects of alternate pollution control measures. The principal issue here concerns the dynamic inconsistency of the optimal solution. Inter alia, I compare the steady state levels of pollution under optimal and under dynamically consistent policies. Copyright Kluwer Academic Publishers 1996

Keywords: dynamic; environmental; game; monopoly; regulation (search for similar items in EconPapers)
Date: 1996
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DOI: 10.1007/BF00339080

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