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Self-Enforcing Climate Change Treaties: A Generalized Differential Game Approach with Applications

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  • Pedro, de Mendonça

Abstract

Based on recent proposals on non cooperative dynamic games for analysing climate negotiation outcomes, such as Dutta and Radner (2004, 2006a), we generalize a specific framework for modelling differential games of this type and describe the set of conditions for the existence of closed loop dynamics and its relation to adaptive evolutionary dynamics. We then show that the Dutta and Radner (2004, 2006a) discrete time dynamic setup is a specific case of that generalization and describe the dynamics both analytically and numerically for closed loop feedback and perfect state patterns. Our discussion is completed with the introduction of a cooperative differential framework for welfare analysis purposes, within our non cooperative proposal for climate negotiations.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 17889.

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Date of creation: Nov 2009
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Handle: RePEc:pra:mprapa:17889

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Keywords: Differential Game Theory; Environmental Economics; Evolutionary Dynamics; Climate Change Treaties;

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  1. Hofbauer, Josef & Oechssler, Jörg & Riedel, Frank, 2009. "Brown-von Neumann-Nash dynamics: The continuous strategy case," Games and Economic Behavior, Elsevier, vol. 65(2), pages 406-429, March.
  2. Christophe Deissenberg & Herbert Dawid & Pavel Sevcik, 2004. "Cheap Talk, Gullibility, and Welfare in an Environmental Taxation Game," Working Papers 2004.137, Fondazione Eni Enrico Mattei.
  3. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
  4. GERMAIN, Marc & VAN STEENBERGHE, Vincent, 2001. "Constraining equitable allocations of tradable greenhouse gases emission quotas by acceptability," CORE Discussion Papers 2001005, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Kossioris, G. & Plexousakis, M. & Xepapadeas, A. & Zeeuw, A.J. de & Mäler, K-G., 2008. "Feedback Nash equilibria for non-linear differential games in pollution control," Open Access publications from Tilburg University urn:nbn:nl:ui:12-378255, Tilburg University.
  6. Angelo Antoci & Antonio Gay & Massimiliano Landi & Pier Luigi Sacco, 2007. "Global Analysis of an Expectations Augmented Evolutionary Dynamics," Working Papers 25-2007, Singapore Management University, School of Economics.
  7. Christiane Clemens & Thomas Riechmann, 2006. "Evolutionary Dynamics in Public Good Games," Computational Economics, Society for Computational Economics, vol. 28(4), pages 399-420, November.
  8. Christophe Deissenberg & Herbert Dawid & Pavel Å evÄ?ík, 2006. "Gullibility and Welfare in an Environmental Taxation Game," Computing in Economics and Finance 2006 505, Society for Computational Economics.
  9. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008.
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