Stochastic Differential Game of Transboundary Pollution and International Environmental Policy

2010 ◽  
Vol 40 (2) ◽  
pp. 413-425 ◽  
Author(s):  
Masakazu MAEZURU
Keyword(s):  
Environmental Policy ◽  
Differential Game ◽  
Transboundary Pollution ◽  
Stochastic Differential Game ◽  
International Environmental Policy

scholarly journals A Stochastic Differential Game of Transboundary Pollution under Knightian Uncertainty of Stock Dynamics

2018 ◽  
Vol 2018 ◽  
pp. 1-12 ◽  
Author(s):  
Chunyan Fu ◽  
Yongxi Yi ◽  
Susu Cheng
Keyword(s):  
Robust Control ◽  
Differential Game ◽  
Transboundary Pollution ◽  
Knightian Uncertainty ◽  
Stochastic Differential Game ◽  
Worst Case ◽  
Numerical Examples ◽  
Optimal Output ◽  
Control Framework ◽  
Pollution Accumulation

With the robust control framework of Hansen and Sargent (2001), this paper investigates a stochastic differential game of transboundary pollution between two regions under Knightian uncertainty of stock dynamics. Both regions are assumed to play a noncooperative and a cooperative game, and the worst-case pollution accumulation processes for discrete robustness parameters are characterized. Our objective is to identify both regions’ optimal output and emission levels and analyze the effects of the Knightian uncertainty of pollution stock dynamics on both regions’ optimization behavior. We illustrate the results with some numerical examples.

scholarly journals A Cooperative Stochastic Differential Game of Transboundary Industrial Pollution between Two Asymmetric Nations

2017 ◽  
Vol 2017 ◽  
pp. 1-10 ◽  
Author(s):  
Yongxi Yi ◽  
Rongwei Xu ◽  
Sheng Zhang
Keyword(s):  
Differential Game ◽  
Pollution Control ◽  
Industrial Pollution ◽  
Stackelberg Game ◽  
Infinite Horizon ◽  
Pollution Abatement ◽  
Transboundary Pollution ◽  
Stochastic Differential Game ◽  
Tax Rate ◽  
Consistent Solution

Considering the fact that transboundary pollution control calls for the cooperation between interested parties, this paper studies a cooperative stochastic differential game of transboundary industrial pollution between two asymmetric nations in infinite-horizon level. In this paper, we model two ways of transboundary pollution: one is an accumulative global pollutant with an uncertain evolutionary dynamic and the other is a regional nonaccumulative pollutant. In our model, firms and governments are separated entities and they play a Stackelberg game, while the governments of the two nations can cooperate in pollution reduction. We discuss the feedback Nash equilibrium strategies of governments and industrial firms, and it is found that the governments being cooperative in transboundary pollution control will set a higher pollution tax rate and make more pollution abatement effort than when they are noncooperative. Additionally, a payment distribution mechanism that supports the subgame consistent solution is proposed.

International Environmental Policy

1996 ◽  
Author(s):  
Lynton Keith Caldwell ◽  
Paul Stanley Weiland
Keyword(s):  
Environmental Policy ◽  
International Environmental Policy
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