Modeling market equilibrium for transboundary environmental problem

Kryazhimskiy, A.V., Nentjes, A., Shibayev, S., & Tarasyev, A.M. (2001). Modeling market equilibrium for transboundary environmental problem. Nonlinear Analysis : Theory, Methods & Applications 10.1016/S0362-546X(01)00240-1.

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We model the international negotiations on acid deposition reduction in Europe as a multiplayer non-cooperative normal form game. The equilibrium combining the properties of Nash equilibria and Pareto-optimal outcomes, is studied. We prove its existence and investigate a dynamic combined best reply-exchange rate adjustment algorithm to achieve it. The algorithm is interpreted as a repeated auction in an informationally-decentralized decision-making environment. The parties to the negotiation are supposed to act as price-takers and at each round maximize their net utilities subject to emission reduction feasibility and iteratively updated exchange rate constraints.

Item Type: Article
Uncontrolled Keywords: Market equilibria; Repeated auction; Pareto-optimality
Research Programs: Dynamic Systems (DYN)
Bibliographic Reference: Nonlinear Analysis: Theory, Methods & Applications; 47(2):991-1002 (August 2001) (Published online 17 July 2001)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 02:13
Last Modified: 27 Aug 2021 17:37

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