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Differential Game Approach for International Environmental Agreements with Social Externalities

Listed author(s):
  • Lina Mallozzi

    ()

    (University of Naples Federico II, Faculty of Economics, Naples, Italy)

  • Stefano Patri

    ()

    (University of Rome I, Rome, Italy)

  • Armando Sacco

    ()

    (University of Rome I, Rome, Italy)

Registered author(s):

    In this work we study an N-player differential game, in which positive social externalities affect the payoffs of the players when they make an agreement. We divide the N players in two homogeneous groups, N1 developed countries and N2 developing countries. For the latter, we consider a damage-cost function that evolves in time. We imagine the externalities as the possibility that bilateral or multilateral agreements of various nature are by-products of an International Environmental Agreement (IEA). After the determination of emissions solutions, we use the externalities to investigate whether it is possible to have a self-enforcing agreement on pollution emissions in the short run.

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    File URL: http://auco.cuni.cz/mag/article/download/id/169/type/attachment
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    Article provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its journal Czech Economic Review.

    Volume (Year): 9 (2015)
    Issue (Month): 3 (December)
    Pages: 135-154

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    Handle: RePEc:fau:aucocz:au2015_135
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    1. Michael Finus, 2001. "Game Theory and International Environmental Cooperation," Books, Edward Elgar Publishing, number 2118.
    2. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
    3. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    4. Effrosyni Diamantoudi & Eftichios Sartzetakis, 2002. "Stable International Environmental Agreements: An Analytical Approach," Others 0201001, EconWPA.
    5. Fuentes-Albero, Cristina & Rubio, Santiago J., 2010. "Can international environmental cooperation be bought?," European Journal of Operational Research, Elsevier, vol. 202(1), pages 255-264, April.
    6. William D. Nordhaus, 1992. "Rolling the 'Dice': An Optimal Transition Path for Controlling Greenhouse Gases," Cowles Foundation Discussion Papers 1019, Cowles Foundation for Research in Economics, Yale University.
    7. Santiago Rubio & Alistair Ulph, 2003. "An Infinite-Horizon Model of Dynamic Membership of International Environmental Agreements," Working Papers 2003.57, Fondazione Eni Enrico Mattei.
    8. Pavlova, Yulia & de Zeeuw, Aart, 2013. "Asymmetries in international environmental agreements," Environment and Development Economics, Cambridge University Press, vol. 18(01), pages 51-68, February.
    9. Masoudi, Nahid & Zaccour, Georges, 2013. "A differential game of international pollution control with evolving environmental costs," Environment and Development Economics, Cambridge University Press, vol. 18(06), pages 680-700, December.
    10. repec:ebl:ecbull:v:17:y:2006:i:4:p:1-8 is not listed on IDEAS
    11. Marie-Laure Cabon-Dhersin & Shyama V. Ramani, 2006. "Can Social Externalities Solve the Small Coalitions Puzzle in International Environmental Agreements?," Economics Bulletin, AccessEcon, vol. 17(4), pages 1-8.
    12. d'ASPREMONT, Claude & JACQUEMIN, Alexis & GABSZEWICZ, Jean J. & WEYMARK, John A., "undated". "On the stability of collusive price leadership," CORE Discussion Papers RP 522, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Lina Mallozzi & Stef Tijs, 2008. "Conflict And Cooperation In Symmetric Potential Games," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 10(03), pages 245-256.
    14. Subhadip Chakrabarti & Robert Gilles & Emiliya Lazarova, 2011. "Strategic behavior under partial cooperation," Theory and Decision, Springer, vol. 71(2), pages 175-193, August.
    15. Michèle Breton & Lucia Sbragia & Georges Zaccour, 2010. "A Dynamic Model for International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 25-48, January.
    16. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    17. Lina Mallozzi & Stef Tijs, 2009. "Coordinating choice in partial cooperative equilibrium," Economics Bulletin, AccessEcon, vol. 29(2), pages 1459-1465.
    18. Santiago Rubio & Begoña Casino, 2005. "Self-enforcing international environmental agreements with a stock pollutant," Spanish Economic Review, Springer;Spanish Economic Association, vol. 7(2), pages 89-109, 06.
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