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Environmental Options and Technological Innovation: An Evolutionary Game Model

Author

Listed:
  • Simone Borghesi

    (University of Siena)

  • Angelo Antoci

    (University of Sassari)

  • Marcello Galeotti

    (University of Florence)

Abstract

This paper analyses the effects on economic agents' behaviour of an innovative environmental protection mechanism that the Public Administration of a tourist region may adopt to attract visitors while protecting the environment. On the one hand, the Public Administration sells to the tourists an environmental call option that gives them the possibility of being (partially or totally) reimbursed if the environmental quality in the region turns out to be below a given threshold level. On the other hand, it offers the firms that adopt an innovative, non-polluting technology an environmental put option that allows them to get a reimbursement for the additional costs imposed by the new technology if the environmental quality is above the threshold level. The aim of the paper is to study the dynamics that arise with this financial mechanism from the interaction between the economic agents and the Public Administration in an evolutionary game context.

Suggested Citation

  • Simone Borghesi & Angelo Antoci & Marcello Galeotti, 2009. "Environmental Options and Technological Innovation: An Evolutionary Game Model," Working Papers 2009.90, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2009.90
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    Cited by:

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    2. Esther Blanco & Javier Lozano, 2015. "Ecolabels, uncertified abatement, and the sustainability of natural resources: an evolutionary approach," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 623-647, July.
    3. Gianluca Iannucci & Federico Martellozzo & Filippo Randelli, 2022. "Sustainable development of rural areas: a dynamic model in between tourism exploitation and landscape decline," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 991-1016, July.
    4. Angelo Antoci & Marcello Galeotti & Davide Radi, 2011. "Financial Tools for the Abatement of Traffic Congestion: A Dynamical Analysis," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 389-405, October.
    5. Zi Tang & Minsi Zhang, 2023. "Evolutionary game analysis of energy saving behavior of tourism enterprises under carbon emission constraints," International Journal of Low-Carbon Technologies, Oxford University Press, vol. 18, pages 49-54.
    6. Aaron D. Wood & Charles F. Mason & David Finnoff, 2025. "The development of OPEC: an evolutionary game theory and agent-based modeling approach," SN Business & Economics, Springer, vol. 5(7), pages 1-18, July.
    7. Mikhail Anufriev & Davide Radi & Fabio Tramontana, 2018. "Some reflections on past and future of nonlinear dynamics in economics and finance," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 41(2), pages 91-118, November.
    8. Fabio Castelli & Marcello Galeotti & Giovanni Rabitti, 2019. "Financial Instruments for Mitigation of Flood Risks: The Case of Florence," Risk Analysis, John Wiley & Sons, vol. 39(2), pages 462-472, February.
    9. Wood, Aaron D. & Mason, Charles F. & Finnoff, David, 2016. "OPEC, the Seven Sisters, and oil market dominance: An evolutionary game theory and agent-based modeling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 66-78.
    10. Simone Borghesi, 2020. "Satisfied or Reimbursed: An Innovative Index-Based Mechanism for the Environmental Protection of a Tourist Region," Sustainability, MDPI, vol. 12(21), pages 1-8, October.
    11. Juan M. Hernández & Jacques Bulchand-Gidumal & Manuel Chica, 2022. "The Role of the Tourism Network in the Coordination of Pandemic Control Measures," Sustainability, MDPI, vol. 14(23), pages 1-17, December.

    More about this item

    Keywords

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    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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