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Interconnected games and international environmental problems

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Author Info

  • Henk Folmer
  • Pierre Mouche
  • Shannon Ragland

Abstract

The purpose of this paper is to introduce the concept of interconnected games and to show its relevance for modeling international environmental problems. It is argued that an interconnected game approach to international environmental problems may enhance cooperation and provide an alternative to the use of financial side payments to induce countries to cooperate. Two types of interconnected games are distinguished in this paper, i.e. direct sum games and tensor games. In the former all the constituting isolated games are games in strategic form and in the latter they are repeated games. In both cases the interconnected game can be interpreted as a multiple objective game, but only the setting where a trade-off is made for the vector-payoffs is considered. In addition to the formal definition of these types of interconnected games, some elementary results concerning Nash equilibria of such games are derived. Copyright Kluwer Academic Publishers 1993

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File URL: http://hdl.handle.net/10.1007/BF00418815
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 3 (1993)
Issue (Month): 4 (August)
Pages: 313-335

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Handle: RePEc:kap:enreec:v:3:y:1993:i:4:p:313-335

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Game theory; repeated games; multiple objective games; tensor games; environmental economics; economic modeling;

References

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  1. Barrett, Scott, 1990. "The Problem of Global Environmental Protection," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 68-79, Spring.
  2. Markusen, James R, 1975. "Cooperative Control of International Pollution and Common Property Resources," The Quarterly Journal of Economics, MIT Press, vol. 89(4), pages 618-32, November.
  3. Kaitala, Veijo & Pohjola, Matti & Tahvonen, Olli, 1990. "Transboundary Air Pollution and Soil Acidification: A Dynamic Analysis of an Acid Rain Game between Finland and the USSR," Discussion Papers 344, The Research Institute of the Finnish Economy.
  4. Henk Folmer & Charles Howe, 1991. "Environmental problems and policy in the Single European Market," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(1), pages 17-41, March.
  5. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring.
  6. Hansen, Stein, 1989. "Debt for nature swaps -- Overview and discussion of key issues," Ecological Economics, Elsevier, vol. 1(1), pages 77-93, February.
  7. Michael Hoel, 1992. "International environment conventions: The case of uniform reductions of emissions," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 141-159, March.
  8. Zhao, Jingang, 1991. "The Equilibria of a Multiple Object Game," International Journal of Game Theory, Springer, vol. 20(2), pages 171-82.
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