On the optimal management of environmental stock externalities
Anastasios Xepapadeas ()
No 2216, DEOS Working Papers from Athens University of Economics and Business
Following a brief review of the management of environmental externalities under strategic interactions in the traditional temporal domain, results are extended to the spatiotemporal domain. Conditions for spatial open-loop and feedback Nash equilibria, along with conditions for the benchmark cooperative solution, are presented and compared. A simplified numerical example illustrates the spatial patterns emerging at a steady state under Fickian diffusion and dispersal kernels, and the inefficiency of spatially-flat emission taxes. This conceptual framework could provide new research areas.
Keywords: spatial diffusion; dispersion kernel; open-loop Nash equilibrium; feedback Nash equilibrium; cooperative solution; steady state; optimal emission tax (search for similar items in EconPapers)
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Journal Article: On the optimal management of environmental stock externalities (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:aue:wpaper:2216
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