### Abstract

Original language | English |
---|---|

Title of host publication | Handbook of Dynamic Game Theory |

Editors | T. Basar, G. Zaccour |

Place of Publication | Cham |

Publisher | Springer |

Pages | 703-728 |

ISBN (Print) | 9783319273358 |

Publication status | Published - 2018 |

### Fingerprint

### Keywords

- differential games
- multiple nash equilibria
- international pollution control
- climate change
- partial cooperation
- international environmental agreements
- stability
- non-cooperative games
- cooperative games
- evolutionary games

### Cite this

*Handbook of Dynamic Game Theory*(pp. 703-728). Cham: Springer.

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*Handbook of Dynamic Game Theory.*Springer, Cham, pp. 703-728.

**Dynamic games of international pollution control : A selective review.** / de Zeeuw, Aart.

Research output: Chapter in Book/Report/Conference proceeding › Chapter › Scientific › peer-review

TY - CHAP

T1 - Dynamic games of international pollution control

T2 - A selective review

AU - de Zeeuw, Aart

PY - 2018

Y1 - 2018

N2 - A differential game is the natural framework of analysis for many problems in environmental economics. This chapter focuses on the game of international pollution control and more specifically on the game of climate change with one global stock of pollutants. The chapter has two main themes. First, the different noncooperative Nash equilibria (open loop, feedback, linear, nonlinear) are derived. In order to assess efficiency, the steady states are compared with the steady state of the full-cooperative outcome. The open-loop Nash equilibrium is better than the linear feedback Nash equilibrium, but a nonlinear feedback Nash equilibrium exists that is better than the open-loop Nash equilibrium. Second, the stability of international environmental agreements (or partial-cooperation Nash equilibria) is investigated, from different angles. The result in the static models that the membership game leads to a small stable coalition is confirmed in a dynamic model with an open-loop Nash equilibrium. The result that in an asymmetric situation transfers exist that sustain full cooperation under the threat that the coalition falls apart in case of deviations is extended to the dynamic context. The result in the static model that farsighted stability leads to a set of stable coalitions does not hold in the dynamic context if detection of a deviation takes time and climate damage is relatively important.

AB - A differential game is the natural framework of analysis for many problems in environmental economics. This chapter focuses on the game of international pollution control and more specifically on the game of climate change with one global stock of pollutants. The chapter has two main themes. First, the different noncooperative Nash equilibria (open loop, feedback, linear, nonlinear) are derived. In order to assess efficiency, the steady states are compared with the steady state of the full-cooperative outcome. The open-loop Nash equilibrium is better than the linear feedback Nash equilibrium, but a nonlinear feedback Nash equilibrium exists that is better than the open-loop Nash equilibrium. Second, the stability of international environmental agreements (or partial-cooperation Nash equilibria) is investigated, from different angles. The result in the static models that the membership game leads to a small stable coalition is confirmed in a dynamic model with an open-loop Nash equilibrium. The result that in an asymmetric situation transfers exist that sustain full cooperation under the threat that the coalition falls apart in case of deviations is extended to the dynamic context. The result in the static model that farsighted stability leads to a set of stable coalitions does not hold in the dynamic context if detection of a deviation takes time and climate damage is relatively important.

KW - differential games

KW - multiple nash equilibria

KW - international pollution control

KW - climate change

KW - partial cooperation

KW - international environmental agreements

KW - stability

KW - non-cooperative games

KW - cooperative games

KW - evolutionary games

M3 - Chapter

SN - 9783319273358

SP - 703

EP - 728

BT - Handbook of Dynamic Game Theory

A2 - Basar, T.

A2 - Zaccour, G.

PB - Springer

CY - Cham

ER -