This paper extends the classical exhaustible-resource/stock-pollution model with the irreversibility of pollution decay. Within this framework, we answer the question how the potential irreversibility of pollution affects the extraction path. We investigate the conditions under which the economy...

We propose a new methodology exploring Markov perfect equilibrium strategies in differential games with regime switching. Specifically, we develop a general game with two players having two kinds of strategies. Players choose an action that influences the evolution of a state variable, and...

This paper focuses both on the competition process and the firms' liability in environmental protection and the demonstration is made by comparing two models of safety investment. The first one shows sensitive players to their environmental liability: they seek to minimize the technologies...

We devise a system of coupled incentives that stimulate economic agents to coordinate their actions. The agents are price takers and their actions would be independent of one another (“uncoupled”) if incentives were not implemented. The action coordination is expected to help a technology...