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Interconnected games and international environmental problems

  • Henk Folmer
  • Pierre Mouche
  • Shannon Ragland

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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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
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100263

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  1. Veijo Kaitala & Matti Pohjola & Olli Tahvonen, 1992. "Transboundary air pollution and soil acidification: A dynamic analysis of an acid rain game between Finland and the USSR," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 2(2), pages 161-181, March.
  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. Hansen, Stein, 1989. "Debt for nature swaps -- Overview and discussion of key issues," Ecological Economics, Elsevier, vol. 1(1), pages 77-93, February.
  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. 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.
  6. Barrett, Scott, 1990. "The Problem of Global Environmental Protection," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 68-79, Spring.
  7. Zhao, Jingang, 1991. "The Equilibria of a Multiple Object Game," International Journal of Game Theory, Springer, vol. 20(2), pages 171-82.
  8. 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.
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