Game Theoretic Modeling in Environmental and Resource Economics
We cover applications of game theory in environmental and resource economics with a particular emphasis on noncooperative transboundary pollution and resource games. Both flow and stock pollutants are considered. Equilibrium concepts in static and dynamic games are reviewed. We present an application of game theoretical tools related to the formation and sustainability of cooperation in transboundary pollution games. We discuss the analytical tools relevant for the case of a stock pollutant and offer an application related to the optimal institutional arrangement to regulate a pollutant when several jurisdictions are involved.
KeywordsNash equilibrium Dynamic game Grand coalition Equilibrium payoff International environmental agreement
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