Coordinating carbon emissions via production quantities: a differential game approach
type: Item
instance of: scholarly article
title: Coordinating carbon emissions via production quantities: a differential game approach
zbMATH Open document ID: 1478.91137
author: Gila E. Fruchter
author: Hussein Naseraldin
published in: Games
publication date: 2021-11-26T00:00:00Z
review text: Summary: Production emissions in the industrial sector are a major source of environmental pollution. In this paper, we explore how emission considerations are integrated with production decisions. We develop a dynamic model consisting of two firms located in the same industrial park, which satisfies exogenously given demands in separate markets. The two firms can build up or rundown stocks (full backlogging), both of which are costly. The emission cost depends on the total output of the two firms. We develop Nash equilibrium feedback strategies, where each firm decides on its output based on its inventory or the inventories of both. We also develop a social planning solution where decisions are centralized. We present the analytic results for the total profits in these settings. The results show the benefits of a decentralized approach over a centralized one, provided there is a mechanism for coordination. Finally, emission costs are compared for the various solution concepts.
Mathematics Subject Classification ID: 91B76
Mathematics Subject Classification ID: 91A23
Mathematics Subject Classification ID: 91A80
zbMATH DE Number: 7434014
zbMATH Keywords: decentralized
zbMATH Keywords: centralized
zbMATH Keywords: industrial parks
zbMATH Keywords: differential games
zbMATH Keywords: emission
MaRDI profile type: Publication
full work available at URL: g12010015
OpenAlex ID: W3127105667
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DOI: 10.3390/G12010015
description: scientific article; zbMATH DE number 7434014