Group for Research in Decision Analysis

Pollution control in a multiregional setting: A differential game with spatially distributed controls

Guiomar Martín-Herrán Full Professor, Departamento de Economía Aplicada, Universidad de Valladolid, Spain

We analyze a differential game model where pollution control is spatially distributed among a number, possibly large, of agents with predetermined spatial relationships. The analysis emphasizes the effects that could be expected as a consequence of the different geographical relationships among decision makers. The game has one state variable (pollution stock) distributed among one large region divided in subregions which control their own emissions of pollutants. The emissions are also represented as distributed variables. The dynamics of the state variable is defined by a parabolic partial differential equation. We numerically characterize the feedback Nash equilibrium of a discrete-space model that still captures the spatial interactions among agents. Numerical experiments are provided to analyze the spatial problem of transboundary pollution.

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