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Group Decision and Negotiation

, Volume 4, Issue 1, pp 39–57 | Cite as

Environmental coordination in dynamic oligopolistic markets

  • A. Haurie
Article

Abstract

This article deals with the design of a coordination scheme which leads a set of firms competing on an oligopolistic market to achieve a global environmental constraint, for example, a global upper bound on some pollutant emissions. The concept of normalized equilibrium is used to design a noncooperative equilibrium under the global emission constraint. This equilibrium is based on the computation of a common multiplier for the global constraint, associated with a weighting vector, which indicates the relative importance given to each firm in the achievement of the constraint. This weighted multiplier is used to design an ad nominem tax scheme which induces the oligopolists to achieve the common global constraint. Finally it is shown that this equilibrium can be designed, for the long term, by restricting the analysis to an asymptotic equilibrium steady state, called turnpike equilibrium.

Key Words

game theory equilibrium differential game turnpike asymptotic stability effluent tax 

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Copyright information

© Kluwer Academic Publishers 1995

Authors and Affiliations

  • A. Haurie
    • 1
  1. 1.Department of Management StudiesUniversity of GenevaGenevaSwitzerland

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