Geodesic
Dynamic Oligopoly Competition with Public Environmental Information Disclosure
Contributions to game theory and management, Tome 1 (2007), pp. 326-345.

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The main purpose of this paper is to study the impact of traditional and emergent environmental regulations on firms’ strategies and outcomes. The former corresponds to, e.g., emissions taxing, and the latter to emissions reporting. To do so, we consider a differential game between two polluting firms. The market potential of each firm varies with its goodwill, which evolution depends on its advertising effort and on its emissions, as well as those of its competitor. We characterize the open-loop Nash equilibrium and contrast the results obtained under different regulatory regimes (laisser-faire, traditional regulation, emergent regulation and dual regulation). We also carry out a sensitivity analysis to assess the impact of some key model parameters on strategies, steady-state goodwill stocks and payoffs.
Keywords: Traditional Environmental Regulation; Public Disclosure Program; Pricing; Advertising; Goodwill; Differential games. 
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Guiomar Martín-Herrán; Abderrahmane Sokri; Georges Zaccour. Dynamic Oligopoly Competition with Public Environmental Information Disclosure. Contributions to game theory and management, Tome 1 (2007), pp. 326-345. http://geodesic.mathdoc.fr/item/CGTM_2007_1_a20/

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