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Contributions to Game Theory and Management, 2012 Volume 5, Pages 310–320 (Mi cgtm168)

Differential Game of Pollution Control with Overlapping Generations

Stefan Wrzaczekab, Ekaterina Shevkoplyasc, Sergey Kostyuninc

a Vienna University of Technology, Institute of Mathematical Methods in Economics, Argentinierstr. 8, 1040 Vienna
b Vienna Institute of Demography (Austrian Academy of Sciences, Wittgenstein Centre), Wohllebeng. 12-14, 1040 Vienna, Austria
c Saint-Petersburg State University, Universitetskii prospekt 35, Petergof, Saint-Petersburg, Russia 198504

Abstract: We formulate an overlapping generations model on optimal emissions with continuous age-structure. We compare the non-cooperative solution to the cooperative one and obtain fundamental differences in the optimal strategies. Also including an altruistic motive does not avoid the problem of the myopic non-cooperative solution. Finally we define a time-consistent tax scheme to obtain the cooperative solution in the non-cooperative case.

Keywords: differential game, overlapping generations, pollution, Pontryagin's Maximum Principle, Nash equilibrium.

Language: English



© Steklov Math. Inst. of RAS, 2024