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Optimal Demand-Driven Eco-Mechanisms Leading to Equilibrium in Competitive Economy

Author

Listed:
  • Anna Denkowska

    (Cracow University of Economics, Department of Mathematics)

  • Agnieszka Lipieta

    (Cracow University of Economics, Department of Mathematics)

Abstract

We examine new mechanisms that introduce environmentally friendly eco-changes involving the elimination of noxious commodities and take into account the structure of demand without a detrimental effect to agents’ position. In the era of the fourth industrial revolution, these mechanisms allow eliminating unnecessary services or goods that are being replaced by modern technologies. We define optimal mechanisms under the criterion of distance minimization, when a small number of detrimental commodities is excluded from production processes as well as when producers are change-averse. The results have the form of theorems with rigorous proofs.

Suggested Citation

  • Anna Denkowska & Agnieszka Lipieta, 2022. "Optimal Demand-Driven Eco-Mechanisms Leading to Equilibrium in Competitive Economy," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 14(3), pages 225-262, September.
    • Handle: RePEc:psc:journl:v:14:y:2022:i:3:p:225-262
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    mechanisms design; competitive economy; equilibrium; eco-change; optimal mechanism;
    All these keywords.

    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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