CONSISTENCY AND OPTIMALITY IN A DYNAMIC GAME OF POLLUTION CONTROL I: COMPETITION

I model the interaction between a regulator and polluting firms as a Stackelberg differential game in which the regulator leads. The firms create pollution, which results in a stock externality. I analyze the intertemporal effects of alternate pollution control measures in a competitive industry. The principal issue here concerns the dynamic inconsistency of the optimal solution. Inter alia, I compare the steady state levels of pollution under optimal and under time consistent policies. Forthcoming in Environmental and Resource Economics


Issue Date:
1995
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/28351
Total Pages:
29
JEL Codes:
Q25; H32; D62
Series Statement:
ERI Study Paper 95-29




 Record created 2017-04-01, last modified 2017-08-24

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