A brave new world? Kantian–Nashian interaction and the dynamics of global climate change mitigation

R. Quentin Grafton, Tom Kompas, Ngo Van Long*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    26 Citations (Scopus)

    Abstract

    We model game-theoretic situations in which agents motivated by Kantian ethics interact with conventional Nashian agents. We define the concept of generalized Kant–Nash equilibrium which encompasses the Nash equilibrium, the Kantian equilibrium and the Kant–Nash equilibrium as special cases. We show the existence and uniqueness of a Kant–Nash equilibrium in a static game of climate change mitigation, and derive its properties. In a dynamic setting, we analyze a differential game of climate change mitigation in the presence of both types of agents, and compare their Markov emission strategies. For both the static model and the dynamic model, as the population share of Kantians increases, the quality of the environment improves, and both types of agents are better off.

    Original languageEnglish
    Pages (from-to)31-42
    Number of pages12
    JournalEuropean Economic Review
    Volume99
    DOIs
    Publication statusPublished - Oct 2017

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