Pollution control in open Economies: Implications of within-period interactions for dynamic game equilibrium

Akihiko Yanase

    Research output: Contribution to journalArticlepeer-review

    7 Citations (Scopus)

    Abstract

    This paper examines a two-country, dynamic game model of pollution control in the presence of economic interactions between countries within a period, as well as the environmental interaction between periods (i.e., a change in the stock of global pollution). These economic interactions emerge because of changes in the terms of trade of polluting goods or the market share of domestic polluting industries. It is shown that if within-period externalities exist, a noncooperative equilibrium may result in a smaller stock of global pollution in the steady state than does international cooperation. Moreover, the properties of equilibrium paths depend on the direction and size of such externalities. In addition, trigger strategy equilibria that achieve the outcome of the collusive solution are examined.

    Original languageEnglish
    Pages (from-to)277-311
    Number of pages35
    JournalJournal of Economics/ Zeitschrift fur Nationalokonomie
    Volume84
    Issue number3
    DOIs
    Publication statusPublished - 2005 May 1

    Keywords

    • Dynamic game
    • Global pollution
    • International trade

    ASJC Scopus subject areas

    • Business, Management and Accounting(all)
    • Economics and Econometrics

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