A Differential game approach in the case of a polluting oligopoly
In this paper we propose an oligopolistic market model of pollution, where demand is not linear and firms are revenue maximizers. Additionally we assume that the rate of purification is very small tending to zero and that each firm accumulates a pollution share depending for example on firm’s size. The game ends up with Markov strategies employed by all firms. Our findings show that under conditions it is possible a marginal decrease on the total pollution stock to increase firms’ discounted revenues. A reallocation caused by a uniform decrease in all firms pollution, reorders the marginal change of the pollution stocks in reverse of the original order of the allowed pollution.
|Date of creation:||2009|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Maskin, Eric & Tirole, Jean, 1987. "A theory of dynamic oligopoly, III : Cournot competition," European Economic Review, Elsevier, vol. 31(4), pages 947-968, June.
- repec:ebl:ecbull:v:3:y:2007:i:8:p:1-10 is not listed on IDEAS
- Kenji Fujiwara & Norimichi Matsueda, 2007. "On a Nonlinear Feedback Strategy Equilibrium of a Dynamic Game," Economics Bulletin, AccessEcon, vol. 3(8), pages 1-10.
- Tsutsui, Shunichi & Mino, Kazuo, 1990. "Nonlinear strategies in dynamic duopolistic competition with sticky prices," Journal of Economic Theory, Elsevier, vol. 52(1), pages 136-161, October.
- Kirman, Alan P & Sobel, Matthew J, 1974. "Dynamic Oligopoly with Inventories," Econometrica, Econometric Society, vol. 42(2), pages 279-287, March.
- Zhang, Yuzhe, 2007.
"Stochastic optimal growth with a non-compact state space,"
Journal of Mathematical Economics,
Elsevier, vol. 43(2), pages 115-129, February.
- Yuzhe Zhang, 2005. "Stochastic optimal growth with a non-compact state space," Working Papers 639, Federal Reserve Bank of Minneapolis.
- Zhang, Yuzhe, 2007. "Stochastic optimal growth with a non-compact state space," MPRA Paper 23107, University Library of Munich, Germany.
- Reynolds, Stanley S., 1991. "Dynamic oligopoly with capacity adjustment costs," Journal of Economic Dynamics and Control, Elsevier, vol. 15(3), pages 491-514, July.
- repec:dau:papers:123456789/1024 is not listed on IDEAS
- Fudenberg, Drew & Tirole, Jean, 1983. "Capital as a commitment: Strategic investment to deter mobility," Journal of Economic Theory, Elsevier, vol. 31(2), pages 227-250, December.
- Steffen Huck & Hans-Theo Normann & Jörg Oechssler, 2002. "Stability of the Cournot process - experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 31(1), pages 123-136.
- Steffen Huck & Hans-Theo Normann & Joerg Oechssler, 1997. "Stability of the Cournot Process - Experimental Evidence," Experimental 9707002, EconWPA.
- Steffen Huck & Hans-Theo Normann & Jörg Oechssler, 2002. "Stability of the Cournot Process - Experimental Evidence," Bonn Econ Discussion Papers bgse1_2002, University of Bonn, Germany.
- Dockner, Engelbert J. & Sorger, Gerhard, 1996. "Existence and Properties of Equilibria for a Dynamic Game on Productive Assets," Journal of Economic Theory, Elsevier, vol. 71(1), pages 209-227, October.
- Christopher Harris & John Vickers, 1987. "Racing with Uncertainty," Review of Economic Studies, Oxford University Press, vol. 54(1), pages 1-21.
- Szidarovszky, Ferenc & Yen, Jerome, 1995. "Dynamic Cournot oligopolies with production adjustment costs," Journal of Mathematical Economics, Elsevier, vol. 24(1), pages 95-101.
- Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large Fixed Costs," Econometrica, Econometric Society, vol. 56(3), pages 549-569, May.
- J. Tirole & E. Maskin, 1982. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large-Fixed Costs," Working papers 320, Massachusetts Institute of Technology (MIT), Department of Economics.
- Eric Maskin & Jean Tirole, 2010. "A Theory of Dynamic Oligopoly, 1: Overview and Quantity Competition with Large Fixed Costs," Levine's Working Paper Archive 397, David K. Levine.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, January.
- Sundaram, Rangarajan K., 1989. "Perfect equilibrium in non-randomized strategies in a class of symmetric dynamic games," Journal of Economic Theory, Elsevier, vol. 47(1), pages 153-177, February.
- Benabou, Roland, 1989. "Optimal Price Dynamics and Speculation with a Storable Good," Econometrica, Econometric Society, vol. 57(1), pages 41-80, January.
- Benabou, Roland, 1987. "Optimal price dynamics and speculation with a storable good," CEPREMAP Working Papers (Couverture Orange) 8708, CEPREMAP.
- Haucap, Justus & Kirstein, Roland, 2003. "Government Incentives When Pollution Permits Are Durable Goods," Public Choice, Springer, vol. 115(1-2), pages 163-183, April.
- Haucap, Justus & Kirstein, Roland, 2001. "Government Incentives when Pollution Permits are Durable Goods," CSLE Discussion Paper Series 2001-06, Saarland University, CSLE - Center for the Study of Law and Economics.
- Dockner, Engelbert J. & Van Long, Ngo & Sorger, Gerhard, 1996. "Analysis of Nash equilibria in a class of capital accumulation games," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1209-1235.
- Carlier, G., 2008. "Differentiability properties of rank-linear utilities," Journal of Mathematical Economics, Elsevier, vol. 44(1), pages 15-23, January.
- L. Lambertini, 2007. "Volatility forecasting for crude oil futures," Working Papers 598, Dipartimento Scienze Economiche, Universita' di Bologna.
- Howroyd, T. D. & Russell, A. M., 1984. "Cournot oligopoly models with time delays," Journal of Mathematical Economics, Elsevier, vol. 13(2), pages 97-103, October.
- Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329, March.
- Bernheim, B. Douglas & Ray, Debraj, 1989. "Markov perfect equilibria in altruistic growth economies with production uncertainty," Journal of Economic Theory, Elsevier, vol. 47(1), pages 195-202, February.
- Wirl, Franz, 1996. "Can Leviathan Governments Mitigate the Tragedy of the Commons?," Public Choice, Springer, vol. 87(3-4), pages 363-377, June.
- Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
- Harris, Christopher J, 1985. "Existence and Characterization of Perfect Equilibrium in Games of Perfect Information," Econometrica, Econometric Society, vol. 53(3), pages 613-628, May.
- Van Cayseele, Patrick & Furth, Dave, 1996. "Bertrand-Edgeworth Duopoly with Buyouts or First Refusal Contracts," Games and Economic Behavior, Elsevier, vol. 16(2), pages 153-180, October.
- Eric Maskin & Jean Tirole, 1985. "A Theory of Dynamic Oligopoly, II: Price Competition," Working papers 373, Massachusetts Institute of Technology (MIT), Department of Economics. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:23742. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.