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Dynamically consistent cooperative solution in a differential game of transboundary industrial pollution. (English) Zbl 1210.91098

Summary: This paper presents a cooperative differential game of transboundary industrial pollution. A noted feature of the game model is that the industrial sectors remain competitive among themselves while the governments cooperate in pollution abatement. It is the first time that time consistent solutions are derived in a cooperative differential game on pollution control with industries and governments being separate entities. A stochastic version of the model is presented and a subgame-consistent cooperative solution is provided. This is the first study of pollution management in a stochastic differential game framework.

MSC:

91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91A23 Differential games (aspects of game theory)
91A12 Cooperative games
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