4 Presentations

• 
  03:30 PM - 03:55 PM

  Equilibrium analysis for common-pool resources

  • Roberta Messalli, presenter, Università Federico II Naples
  • Lina Mallozzi, University of Naples Federico II

  An aggregative game to describe investment decision making situations for a Common-Pool Resource is presented: we consider a noncooperative approach, searching a Nash equilibrium, and a cooperative one searching a fully cooperative equilibrium.

  Moreover, we introduce a threshold investment, that depends on the probability of destruction of the CPR, and we study the resulting stochastic aggregative game looking for a Nash equilibrium and a fully cooperative equilibrium.

• 
  03:55 PM - 04:20 PM

  Vehicle scrappage incentives to accelerate the replacement decision of heterogeneous consumers

  • Hosain Zaman, presenter, GERAD, HEC Montréal
  • Georges Zaccour, Chair in Game Theory and Management, GERAD and HEC Montréal

  Vehicle scrappage subsidy programs have been widely applied by governments to replace old cars by newer, more fuel-efficient ones. While these programs have been implemented to motivate earlier replacement, they may not be as effective as expected. From a cost-benefit perspective, the consumers who would have replaced anyway, even without the program, need to be addressed when evaluating the net benefits of the program. This requires accounting for variations in consumers’ willingness to replace. Considering consumer heterogeneity in net trade-in valuation, this study investigates a dynamic vehicle-replacement problem based on a life cycle optimization (LCO) approach. We theoretically demonstrate that although increasing the subsidy level motivates low-value consumers to replace earlier, it also induces consumers with a high net trade-in valuation to replace later to become eligible for the subsidy program. We have also developed a simulation program based on real data to show the application of our general model. According to the simulation results, ignoring consumer heterogeneity could result in an overestimation of the net benefits of the scrappage program.

• 
  04:20 PM - 04:45 PM

  Equilibria in a two species fishery: Dynamic, biological and ownership interactions

  • Ilyass Dahmouni, presenter, GERAD, HEC Montréal
  • Michèle Breton, GERAD, HEC Montréal
  • Georges Zaccour, Chair in Game Theory and Management, GERAD and HEC Montréal

  In this paper we study an example of a two-species fishery dynamic game in which there are two types of agents strategically harvesting each species. The proposed model allows us to study the effect of three externalities, namely: Dynamic interactions, Ownership of the resource, and the Biological interaction between the species on the steady states and the outcomes.

• 
  04:45 PM - 05:10 PM

  Impact of leadership on the stability of international environmental agreements

  • Samar Garrab, presenter, Royal Military College of Canada
  • Michèle Breton, GERAD, HEC Montréal

  We consider international agreements for the protection of the environment where the signatories agree to cooperate to determine the level of their joint emissions. In a stylized model, we evaluate the impact of leadership on the stability of an International Environmental Agreement (IEA) over time. Players’ welfare is constituted of two terms: revenue from production, which is assumed quadratic in a player’s private emissions, and environmental damage cost, which is a non-linear function of the global stock of pollution. We consider a discrete-time, infinite horizon model where only one coalition forms with open membership. The coalition stability concept is based on the non-cooperative point of view, which assumes that agreements must be self-enforcing. To assess the impact of leadership on the stability of the agreement, we compute the steady-state equilibrium pollution stock and the corresponding size of the internally and externally stable coalition under two contrasting assumptions (Nash and Stackelberg).