Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257497 
Year of Publication: 
2021
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 12 [Issue:] 1 [Article No.:] 15 [Publisher:] MDPI [Place:] Basel [Year:] 2021 [Pages:] 1-16
Publisher: 
MDPI, Basel
Abstract: 
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.
Subjects: 
centralized
decentralized
differential games
emission
industrial parks
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.