An integral transformation approach to differential games: a climate model application

Boucekkine, Raouf;Fabbri, Giorgio;Federico, Salvatore;Gozzi, Fausto;Ricci, Cristiano;et.al.
(2025) , 58 pages

Files

2025001.pdf
  • Open Access
  • Adobe PDF
  • 1.55 MB
Download

Details

Authors
  • Boucekkine, RaoufCorresponding members IRES. Aix-Marseille School of Economics, Aix-Marseille University and CNRS, Marseille France
    Author
  • Fabbri, GiorgioUniv. Grenoble Alpes, CNRS, INRA, Grenoble INP, GAEL, Grenoble, France
    Author
  • Federico, SalvatoreDipartimento di Matematica, Universit` a di Bologna, Bologna, Italy
    Author
  • Gozzi, FaustoDipartimento di Economia e Finanza, Libera Universit` a Internazionale degli Studi Sociali ”Guido Carli”, Rome, Italy
    Author
  • Ricci, CristianoUniversita di Pisa, Italy
    Author
Show more
Abstract
We develop an Integral Transformation Method (ITM) for the study of suitable optimal control and differential game models. This allows for a solution to such dynamic problems to be found through solving a family of optimization problems parametrized by time. The method is quite flexible, and it can be used in several economic applications where the state equation and the objective functional are linear in a state variable. We illustrate the ITM in the context of a two-country integrated assessment climate model. We characterize emissions, consumption, transfers, and welfare by computing the Nash equilibria of the associated dynamic game. We then compare them to efficiency benchmarks. Further, we apply the ITM in a robust control setup, where we investigate how (deep) uncertainty affects climate outcomes.
Affiliations

Citations

  • APA
  • Chicago
  • FWB

Boucekkine, R., Fabbri, G., Federico, S., Gozzi, F., Loch-Temzelides, T., & Ricci, C. (2025). An integral transformation approach to differential games: a climate model application (LIDAM Discussion Paper IRES/2025/01). https://hdl.handle.net/2078.5/238902