The international stock pollutant control: a stochastic formulation

In this paper we provide a stochastic dynamic game formulation of the economics of international environmental agreements on the transnational pollution control when the environmental damage arises from stock pollutant that accumulates, for accumulating pollutants such as CO2 in the atmosphere. To improve the cooperative and the noncooperative equilibrium among countries, we propose the criteria of the minimization of the expected discounted total cost. Moreover, we consider Stochastic Dynamic Games formulated as Stochastic Dynamic Programming and Cooperative versus Noncooperative Stochastic Dynamic Games. The performance of the proposed schemes is illustrated by a real data based example

The international stock pollutant control: a stochastic formulation

In this paper we provide a stochastic dynamic game formulation of the economics of international environmental agreements on the transnational pollution control when the environmental damage arises from stock pollutant that accumulates, for accumulating pollutants such as CO2 in the atmosphere. To improve the cooperative and the noncooperative equilibrium among countries, we propose the criteria of the minimization of the expected discounted total cost. Moreover, we consider Stochastic Dynamic Games formulated as Stochastic Dynamic Programming and Cooperative versus Noncooperative Stochastic Dynamic Games. The performance of the proposed schemes is illustrated by a real data based example.Stochastic optimal control, Markov decision processes, Stochastic dynamic programming, Stochastic dynamic games, International pollutant control, Environmental economics, Sustainability,

Finite horizon bargaining and the consistent field

This paper explores the relationships between noncooperative bargaining games and the consistent value for non-transferable utility (NTU) cooperative games. A dynamic approach to the consistent value for NTU games is introduced: the consistent vector field. The main contribution of the paper is to show that the consistent field is intimately related to the concept of subgame perfection for finite horizon noncooperative bargaining games, as the horizon goes to infinity and the cost of delay goes to zero. The solutions of the dynamic system associated to the consistent field characterize the subgame perfect equilibrium payoffs of the noncooperative bargaining games. We show that for transferable utility, hyperplane and pure bargaining games, the dynamics of the consistent fields converge globally to the unique consistent value. However, in the general NTU case, the dynamics of the consistent field can be complex. An example is constructed where the consistent field has cyclic solutions; moreover, the finite horizon subgame perfect equilibria do not approach the consistent value.Noncooperative bargaining games, consistent value, consistent

The Role of Individual Intertemporal Transfers in Dynamic TU-Games

Dynamic TU-games are considered which consist of a finite player set, a finite sequence of TU-games and a profile of intertemporal utility functions. At every stage a (restrictively) additive solution is applied to the TU-game, which results in a stream of payoff distributions, evaluated by the intertemporal utility functions of the players. Players are able to transfer payoffs between stages. The strategic possibilities from individual transfers between periods are modeled by a noncooperative game. Conditions under which a Nash equilibrium in this noncooperative game exists, are established. It is shown when a Nash equilibrium in dominant strategies is Pareto optimal.microeconomics ;

Necessary conditions for linear noncooperative N-player delta differential games on time scales

We present necessary conditions for linear noncooperative N-player delta dynamic games on a generic time scale. Necessary conditions for an open-loop Nash-equilibrium and for a memoryless perfect state Nash-equilibrium are proved.Comment: Partially presented at the "Fifth Symposium on Nonlinear Analysis" (SNA 2007), Torun, Poland, September 10-14, 200

The target projection dynamic

This paper studies the target projection dynamic, which is a model of myopic adjustment for population games. We put it into the standard microeconomic framework of utility maximization with control costs. We also show that it is well-behaved, since it satisfies the desirable properties: Nash stationarity, positive correlation, and existence, uniqueness, and continuity of solutions. We also show that, similarly to other well-behaved dynamics, a general result for elimination of strictly dominated strategies cannot be established. Instead we rule out survival of strictly dominated strategies in certain classes of games. We relate it to the projection dynamic, by showing that the two dynamics coincide in a subset of the strategy space. We show that strict equilibria, and evolutionarily stable strategies in $2\times2$ games are asymptotically stable under the target projection dynamic. Finally, we show that the stability results that hold under the projection dynamic for stable games, hold under the target projection dynamic too, for interior Nash equilibria.target projection dynamic; noncooperative games; adjustment

Ten Little Treasures of Game Theory and Ten Intuitive Contradictions

This paper reports laboratory data for a series of two-person games that are played only once. These games span the standard categories: static and dynamic games with complete and incomplete information. For each game, the treasure is a treatment for which behavior conforms quite nicely to the predictions of the Nash equilibrium or relevant refinement. In each case we change a key payoff parameter in a manner that does not alter the equilibrium predictions, but this theoretically neutral payoff change has a major (often dramatic) effect on observed behavior. These contradictions are generally consistent with simple economic intuition and with a model of iterated noisy introspection for one-shot games.Nash equilibrium, noncooperative games, experiments, bounded rationality, introspection