Adaptation measures and stable international environmental agreements in a pollution dynamic game

Marta Biancardi () and Lucia Maddalena ()
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Marta Biancardi: University of Bari
Lucia Maddalena: University of Foggia

Decisions in Economics and Finance, 2025, vol. 48, issue 1, No 13, 223-240

Abstract: Abstract The paper studies how the effort in research and development (R&D) for adaptation technologies and the effects of spillover can influence the participation in International Environmental Agreements (IEAs). Adaptation is supposed to be a public good because knowledge in adaptation requires investments in R&D that can benefit many countries. Members of the agreement fully share their knowledge and determine their investments in R&D by maximizing their joint welfare, while non-members optimize their individual payoffs under the assumption that part of knowledge unintentionally spills over between a signatory and a non-signatory country and between two non-signatory countries. The model is placed in the context of differential games and we study the open-loop Nash equilibrium of a pollution problem whose stock accumulates and evolves over time. The results obtained show the effects of R&D in adaptation technologies and of knowledge spillover between countries, on the size of stable coalitions and on the evolution of stock pollution.

Keywords: IEA; Adaptation; R& D; Differential games; Open-loop Nash equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10203-024-00495-5

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