Optimal coalition splitting with heterogenous strategies
Purpose – The authors characterize the conditions under which a country may eventually split and when it splits within an infinite horizon multi-stage differential game. Design/methodology/approach – In contrast to the existing literature, the authors do not assume that after splitting, players will...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2023-12-01
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| Series: | Fulbright Review of Economics and Policy |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/FREP-05-2023-0021/full/pdf |
| _version_ | 1797385897924100096 |
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| author | Raouf Boucekkine Carmen Camacho Weihua Ruan Benteng Zou |
| author_facet | Raouf Boucekkine Carmen Camacho Weihua Ruan Benteng Zou |
| author_sort | Raouf Boucekkine |
| collection | DOAJ |
| description | Purpose – The authors characterize the conditions under which a country may eventually split and when it splits within an infinite horizon multi-stage differential game. Design/methodology/approach – In contrast to the existing literature, the authors do not assume that after splitting, players will adopt Markovian strategies. Instead, the authors assume that while the splitting country plays Markovian, the remaining coalition remains committed to the collective control of pollution and plays open-loop. Findings – Within a full linear-quadratic model, the authors characterize the optimal strategies. The authors later compare with the outcomes of the case where the splitting country and the remaining coalition play both Markovian. The authors highlight several interesting results in terms of the implications for long-term pollution levels and the duration of coalitions under heterogenous strategies as compared to Markovian behavior. Originality/value – In this paper, the authors have illustrated the richness of the simplications of enlarging the set of strategies in terms of the emergence of coalitions, their duration and the implied welfare levels per player. Varying only three parameters (the technological gap, pollution damage and coalition payoff share distribution across players), the authors have been able to generate, among other findings, quite different rankings of welfare per player depending on whether the remaining coalitions after split play Markovian or stay precommited to the pre-splitting period decisions. |
| first_indexed | 2024-03-08T22:02:03Z |
| format | Article |
| id | doaj.art-4edada641dee460bb4fd14e793d47146 |
| institution | Directory Open Access Journal |
| issn | 2635-0173 2635-0181 |
| language | English |
| last_indexed | 2024-03-08T22:02:03Z |
| publishDate | 2023-12-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Fulbright Review of Economics and Policy |
| spelling | doaj.art-4edada641dee460bb4fd14e793d471462023-12-19T12:08:42ZengEmerald PublishingFulbright Review of Economics and Policy2635-01732635-01812023-12-013218420210.1108/FREP-05-2023-0021Optimal coalition splitting with heterogenous strategiesRaouf Boucekkine0Carmen Camacho1Weihua Ruan2Benteng Zou3Rennes School of Business France, Rennes, FrancePSE, Paris, FrancePurdue University Northwest, Hammond, Indiana, USAUniversity of Luxembourg, Luxembourg, LuxembourgPurpose – The authors characterize the conditions under which a country may eventually split and when it splits within an infinite horizon multi-stage differential game. Design/methodology/approach – In contrast to the existing literature, the authors do not assume that after splitting, players will adopt Markovian strategies. Instead, the authors assume that while the splitting country plays Markovian, the remaining coalition remains committed to the collective control of pollution and plays open-loop. Findings – Within a full linear-quadratic model, the authors characterize the optimal strategies. The authors later compare with the outcomes of the case where the splitting country and the remaining coalition play both Markovian. The authors highlight several interesting results in terms of the implications for long-term pollution levels and the duration of coalitions under heterogenous strategies as compared to Markovian behavior. Originality/value – In this paper, the authors have illustrated the richness of the simplications of enlarging the set of strategies in terms of the emergence of coalitions, their duration and the implied welfare levels per player. Varying only three parameters (the technological gap, pollution damage and coalition payoff share distribution across players), the authors have been able to generate, among other findings, quite different rankings of welfare per player depending on whether the remaining coalitions after split play Markovian or stay precommited to the pre-splitting period decisions.https://www.emerald.com/insight/content/doi/10.1108/FREP-05-2023-0021/full/pdfCoalition splittingEnvironmental agreementsDifferential gamesMultistage optimal controlPrecommitment vs Markovian |
| spellingShingle | Raouf Boucekkine Carmen Camacho Weihua Ruan Benteng Zou Optimal coalition splitting with heterogenous strategies Fulbright Review of Economics and Policy Coalition splitting Environmental agreements Differential games Multistage optimal control Precommitment vs Markovian |
| title | Optimal coalition splitting with heterogenous strategies |
| title_full | Optimal coalition splitting with heterogenous strategies |
| title_fullStr | Optimal coalition splitting with heterogenous strategies |
| title_full_unstemmed | Optimal coalition splitting with heterogenous strategies |
| title_short | Optimal coalition splitting with heterogenous strategies |
| title_sort | optimal coalition splitting with heterogenous strategies |
| topic | Coalition splitting Environmental agreements Differential games Multistage optimal control Precommitment vs Markovian |
| url | https://www.emerald.com/insight/content/doi/10.1108/FREP-05-2023-0021/full/pdf |
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