Open AccessINTERNATIONAL ENVIRONMENTAL AGREEMENTS WITH DEVELOPED AND DEVELOPING COUNTRIES IN A DYNAMIC APPROACH
Author(s) -
BIANCARDI MARTA,
VILLANI GIOVANNI
Publication year - 2014
Publication title -
natural resource modeling
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.28
H-Index - 32
eISSN - 1939-7445
pISSN - 0890-8575
DOI - 10.1111/nrm.12037
Subject(s) - economics , differential game , developing country , nash equilibrium , stability (learning theory) , order (exchange) , stock (firearms) , microeconomics , computer science , mathematical optimization , economic growth , mathematics , mechanical engineering , finance , machine learning , engineering
This paper is devoted to study the stability of international environmental agreements (IEAs) in a pollution abatement model. We focus our attention on two asymmetric agents: developed countries characterized by a strong measure of environmental awareness and developing ones characterized by less attention to environmental preservation. We model a differential game in order to determine both the optimal path of the abatement levels and stock pollutant as results of open‐loop and feedback Nash equilibria. By means of the concepts of internal and external stability, we explain how the environmental awareness of two types of countries and the number of cooperators and defectors influence the size of stable coalitions. The results establish that the asymmetry assumption does not have consequences for the stability of the grand coalition, which can be obtained only with transfers.