Transfers to Sustain Dynamic Core-Theoretic Cooperation in International Stock Pollutant Control

Marc Germain, Philippe Toint, Henry Tulkens and Aart Zeeuw
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Marc Germain: Université Catholique de Louvain
Philippe Toint: Facultés Universitaires Notre Dame de la Paix
Aart Zeeuw: Tilburg University

Chapter Chapter 12 in Public goods, environmental externalities and fiscal competition, 2006, pp 251-274 from Springer

Abstract: For international environmental agreements aiming at world efficiency in the presence of transboundary flow pollution, it is known that, in a static context, efficiency and stability in the sense of the core of a cooperative game can be achieved using appropriately defined transfers between the countries involved. However, for accumulating pollutants, such as CO2 in the atmosphere, a dynamic analysis is required. This paper provides a transfer scheme for which a core property is proved analytically in a dynamic (closed-loop) game theoretic context. The characteristic function of the cooperative dynamic game yielding this result is discussed and an algorithm to compute the transfers numerically is presented and tested on an example. The transfers are also compared with an open-loop formulation of the model.

Keywords: Nash Equilibrium; Cooperative Game; Abatement Cost; Dynamic Game; Financial Transfer (search for similar items in EconPapers)
Date: 2006
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Journal Article: Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control (2003)
Working Paper: Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control (2003)
Working Paper: Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control (2003)
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DOI: 10.1007/978-0-387-25534-7_14

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