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Game-Theoretic Modelling of Transboundary Pollution

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  • Missfeldt, Fanny
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    Abstract

    Transboundary pollution is pollution that is emitted in one country, and deposited or causing harm in another country. Due to the absence of a supranational institution that could enforce international legislation, transboundary externalities cannot be approached in the same way as domestic pollution problems. In an attempt to find non-traditional solutions to such -border problems, recent environmental economics literature incorporates behavioural assumptions with the help of game theory. This paper discusses how different types of transboundary pollution have been approached, and which static and dynamic game theoretic solution concepts have been evaluated. While full cooperation among countries yields the economically optimal outcome it is difficult to reach, because countries are faced with an inequitable sharing of the burden of pollution abatement and with the incentive to free-ride. Side payment schemes to aid burden sharing and strategies to circumvent free riding are reviewed. Issues such as transaction costs, information and motivation are briefly discussed. Copyright 1999 by Blackwell Publishers Ltd

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

    Volume (Year): 13 (1999)
    Issue (Month): 3 (July)
    Pages: 287-321

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    Handle: RePEc:bla:jecsur:v:13:y:1999:i:3:p:287-321

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    Cited by:
    1. Basak Bayramoglu, 2006. "Transboundary Pollution in the Black Sea: Comparison of Institutional Arrangements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 35(4), pages 289-325, December.
    2. Anindita Sen & Rajat Acharyya, 2013. "Can policies backfire? The impact of uncoordinated domestic policies on global pollution," Economics Bulletin, AccessEcon, vol. 33(4), pages 2682-2691.
    3. Norimichi Matsueda, 2004. "Potential Failure of an International Environmental Agreement under Asymmetric Information," Economics Bulletin, AccessEcon, vol. 17(4), pages 1-8.

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