Optimal Demand-Driven Eco-Mechanisms Leading to Equilibrium in Competitive Economy

Anna Denkowska () and Agnieszka Lipieta ()
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Anna Denkowska: Cracow University of Economics, Department of Mathematics
Agnieszka Lipieta: Cracow University of Economics, Department of Mathematics

Central European Journal of Economic Modelling and Econometrics, 2022, vol. 14, issue 3, 225-262

Abstract: We examine new mechanisms that introduce environmentally friendly eco-changes involving the elimination of noxious commodities and take into account the structure of demand without a detrimental effect to agents’ position. In the era of the fourth industrial revolution, these mechanisms allow eliminating unnecessary services or goods that are being replaced by modern technologies. We define optimal mechanisms under the criterion of distance minimization, when a small number of detrimental commodities is excluded from production processes as well as when producers are change-averse. The results have the form of theorems with rigorous proofs.

Keywords: mechanisms design; competitive economy; equilibrium; eco-change; optimal mechanism (search for similar items in EconPapers)
JEL-codes: D5 L1 O1 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:psc:journl:v:14:y:2022:i:3:p:225-262

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