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Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control

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  • GERMAIN, Marc
  • TOINT, Philippe
  • TULKENS, Henry
  • DE ZEEUW, Aart

Abstract

For international environmental agreements aiming at world efficiency in the presence of transboundary flow pollution, it is known that, in a static context, efficiency and stability in the sense of the core of a cooperative game can be achieved using appropriately defined transfers between the countries involved. However, for accumulating pollutants, such as CO2 in the atmosphere, a dynamic analysis is required. This paper provides a transfer scheme for which a core property is proved analytically in a dynamic (closed-loop) game theoretic context. The characteristic function of the cooperative dynamic game yielding this result is discussed and an algorithm to compute the transfers numerically is presented and tested on an example. The transfers are also compared with an open-loop formulation of the model.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • GERMAIN, Marc & TOINT, Philippe & TULKENS, Henry & DE ZEEUW, Aart, 2003. "Transfers to sustain dynamic core-theoretic cooperation in international stock pollutant control," LIDAM Reprints CORE 1637, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvrp:1637
    DOI: 10.1016/S0165-1889(02)00107-0
    Note: In : Journal of Economic Dynamics & Control, 28, 79-99, 2003
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