An Iterative Process for International Negotiations on Acid Rain in Northern Europe Using a General Convex Formulation |
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Authors: | M Germain PhL Toint |
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Institution: | (1) CORE, Université Catholique de Louvain, 1348 Louvain-la-Neuve, Belgium;(2) Department of Mathematics, Facultés Universitaires ND de la Paix, B-5000 Namur, Belgium |
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Abstract: | This paper proposes a game theoretical approach of internationalnegotiations on transboundary pollution. This approach is distinguished bya discrete time formulation and by a suitable formulation of the localinformation assumption on cost and damage functions: at each stage of thenegotiation, the parties assign the best possible cooperative state, giventhe available information, as an objective for the next stage. It is shownthat the resulting sequences of states converges from a non-cooperativesituation to an international optimum in a finite number of stages.Furthermore, a financial transfer structure is also presented that makesthe desired sequence of states individually rational and stategically stable.The concepts are applied in a numerical simulation of the SO2transboundary pollution problem related to acid rain in Northern Europe. |
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Keywords: | acid rain game cooperative game theory financial transfers international negotiations |
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