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Prospects of Tools from Differential Games in the Study Of Macroeconomics of Climate Change

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  • Engwerda, J.C.

    (Tilburg University, Center For Economic Research)

Abstract

Abstract: In this note we sketch a dynamic framework within which the discussion on the macro economic effects of climate change take place. The problem setting is characterized by scientific uncertainties about the development of climate, potential large economic losses and human beings having their specific features. Some considerations about climate change, macroeconomics and their relationship are given. A characteristic feature of the problem setting is that there are multiple decision makers interacting in a dynamic world with large uncertainties. Problems of this type have been studied extensively by (dynamic) game theory. A rough literature review is provided and some items open for future research are indicated.

Suggested Citation

  • Engwerda, J.C., 2012. "Prospects of Tools from Differential Games in the Study Of Macroeconomics of Climate Change," Discussion Paper 2012-045, Tilburg University, Center for Economic Research.
  • Handle: RePEc:tiu:tiucen:cac36d07-227b-4cf2-83cb-782e502b36a6
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    References listed on IDEAS

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    1. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    2. Robert J. Aumann, 1995. "Repeated Games with Incomplete Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011476.
    3. Sergiu Hart, 2013. "Adaptive Heuristics," World Scientific Book Chapters,in: Simple Adaptive Strategies From Regret-Matching to Uncoupled Dynamics, chapter 11, pages 253-287 World Scientific Publishing Co. Pte. Ltd..
    4. Henry Tulkens & Parkash Chander, 1997. "The Core of an Economy with Multilateral Environmental Externalities," International Journal of Game Theory, Springer;Game Theory Society, vol. 26(3), pages 379-401.
    5. D. Dragone & L. Lambertini & G. Leitmann & A. Palestini, 2008. "Hamiltonian potential functions for differential games," Working Papers 644, Dipartimento Scienze Economiche, Universita' di Bologna.
    6. Germain, Marc & Toint, Philippe & Tulkens, Henry & de Zeeuw, Aart, 2003. "Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 79-99, October.
    7. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
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    11. W. A. van den Broek & J. C. Engwerda & J. M. Schumacher, 2003. "Robust Equilibria in Indefinite Linear-Quadratic Differential Games," Journal of Optimization Theory and Applications, Springer, vol. 119(3), pages 565-595, December.
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    13. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945.
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    16. Matthew B. Canzoneri & Dale W. Henderson, 1991. "Monetary Policy in Interdependent Economies: A Game-Theoretic Approach," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031787.
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    18. Ngo Long, 2011. "Dynamic Games in the Economics of Natural Resources: A Survey," Dynamic Games and Applications, Springer, vol. 1(1), pages 115-148, March.
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    More about this item

    Keywords

    Climate change; environmental change; macro-economic effects; dynamic games;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D6 - Microeconomics - - Welfare Economics
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F - International Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics

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