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Stable Cooperation Under Environmental Constraints

  • NADEZHDA KOZLOVSKAYA

    ()

    (St. Petersburg University, Universitetski pr. 35, St. Petersburg, 198504, Russia)

  • NIKOLAY ZENKEVICH

    ()

    (St. Petersburg University, Volkhovski per. 1-3, St. Petersburg, 199004, Russia)

Registered author(s):

    A game-theoretic model of territorial environmental production under Cournot competition is studied. The process is modeled as cooperative differential game. The stable distribution mechanism of the common cooperative benefit among players is proposed. We proved that the cooperative total stock of accumulated pollution is strictly less then the pollution under Nash equilibrium for the whole duration of the game. We design a stable Shapley value as a cooperative solution, which is time-consistent. The Shapley value is also strategic stable and satisfies the irrational-behavior-proofness condition. The numerical example is given.

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    Article provided by World Scientific Publishing Co. Pte. Ltd. in its journal International Game Theory Review.

    Volume (Year): 12 (2010)
    Issue (Month): 04 ()
    Pages: 453-470

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    Handle: RePEc:wsi:igtrxx:v:12:y:2010:i:04:p:453-470
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