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Dynamically Consistent Cooperative Solution in a Differential Game of Transboundary Industrial Pollution

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Abstract

This paper presents a cooperative differential game of transboundary industrial pollution. A noted feature of the game model is that the industrial sectors remain competitive among themselves while the governments cooperate in pollution abatement. It is the first time that time consistent solutions are derived in a cooperative differential game on pollution control with industries and governments being separate entities. A stochastic version of the model is presented and a subgame-consistent cooperative solution is provided. This is the first study of pollution management in a stochastic differential game framework.

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Authors and Affiliations

  1. Center for Game Theory, Hong Kong Baptist University, Hong Kong, Hong Kong

    D. W. K. Yeung

  2. Center for Game Theory, St. Petersburg State University, St. Petersburg, Russia

    D. W. K. Yeung

Authors
  1. D. W. K. Yeung
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Correspondence to D. W. K. Yeung.

Additional information

Communicated by G. Leitmann.

This research was supported by the Research Grant Council of Hong Kong Grant HKBU2103/04H and Hong Kong Baptist University Grant FRG/05-06/II22.

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Yeung, D.W.K. Dynamically Consistent Cooperative Solution in a Differential Game of Transboundary Industrial Pollution. J Optim Theory Appl 134, 143–160 (2007). https://doi.org/10.1007/s10957-007-9240-y

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  • DOI: https://doi.org/10.1007/s10957-007-9240-y

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