Comparison of different Stackelberg solutions in a deterministic dynamic pollution control: the time inconsistency problem revisited
Thomas Vallee ()
Working Papers from HAL
In this paper, we study the two well-known supposed consequences of time inconsistency: the subopti-mality of the time consistent solution, and the assuming increase of the follower's cost. To achieve such a goal, we study different dynamic Stackelberg solutions within a pollution control problem framework. This study is made under the assumption of different information structures, mainly we assume open-loop, feedback and closed-loop structures of information. Some of the numerical results may appear counterintuitive. Hence, there may exist some situations where a time consistent solution is optimal in comparison of the time inconsistent one. Moreover, the perfect discretionary solution may be beneficial to everyone.
Keywords: Time inconsistency; Dynamic Stackelberg game; Pollution control; Incohérence temporelle; Jeux de Stackelberg Dynamique; Contrôle de la pollution (search for similar items in EconPapers)
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