Environmental Economics and Sustainability

12 COOPERATIVE GAME THEORY APPLIED TO IEAS: A COMPARISON OF SOLUTION CONCEPTS

Marco Rogna

University of Trento

1. Introduction

Game theory (GT) is the study of mathematical modelling of rational players interacting with each other and it has been extensively applied in the environmental context, ranging from fisheries management to natural resources extraction and waste treatment (Zara et al., 2006a2006a, 2006a2006b). A subtopic that has received special attention is environmental pollution. As soon as the potential negative impact of anthropogenic emissions on the earth's ecosystem was widely recognized by the scientific and international community, different models have been envisaged in order to represent the possible interactions of countries to coordinate their efforts in abating emissions. Based on earlier models of transboundary pollution, a full class of new models has born to depict the ‘global warming game’ (Maler, 1989).

Although the solution concepts that have been adopted are usually already present in the game theoretical literature, it is still important to note that the ‘global warming game’ has its own specificities; indeed it is now possible to speak, without the risk of adding unjustified emphasis, of a new strand in that literature. Three elements, and their specific combination, can be considered the distinctive features of this particular game: the character of the players, the strategies at their disposal and the effects produced by their cooperative ...