Faculty Research Lightning Talk: Environmental Economics and Game Theory

Faculty Research Lightning Talk: EnvironmentalEconomics and Game Theory

Ana Espinola-ArredondoSchool of Economic Sciences, Washington State University

August 18, 2016

Faculty Research Lightning Talk: Environmental Economics and Game Theory

Motivation

Externalities

PollutionClimate ChangeGlobal Warming

Green vs. Brown

Environmental regulation.

Faculty Research Lightning Talk: Environmental Economics and Game Theory

Environmental Regulation

Does environmental regulation affect the market structure?

Entry-DeterrenceMonopoly

Does environmental regulation promote the acquisition ofclean technology?

Clean technology as a tool to avoid entry

Faculty Research Lightning Talk: Environmental Economics and Game Theory

Complete vs. Incomplete Information

Faculty Research Lightning Talk: Environmental Economics and Game Theory

Complete vs. Incomplete Information

The regulator cannot observe:

Firms’ production cost (Efficiency)Total stock of the resourcePolluter

Firms cannot observe:

Competitors’ costsTotal stockConsumers’ preferences about the environment

Faculty Research Lightning Talk: Environmental Economics and Game Theory

Complete vs. Incomplete Information

Results

Regulation can help promote competition in the market

Disinformation sometimes is good!

An incumbent has incentives to acquire clean technology

Consumers’ awareness about the environment affects firms’behavior