International Society of Dynamic Games

Dynamic Games and Applications Seminar

A Stackelberg game approach to evaluate the effectiveness of cap-and-trade regulation under disruption

Nov 7, 2024   11:00 AM — 12:00 PM

Seminar in hybrid format at GERAD room 4488 or Zoom

This study explores the impact of cap-and-trade regulations on the performance of dual-channel green supply chains in the presence of disruptions. It examines the interplay between pricing and greening strategies under cap-and-trade conditions and varying market demand disruptions. The model employs a Stackelberg game framework involving an eco-friendly product manufacturer and a retailer, applicable to centralized and decentralized systems. Results show that a dynamic cap-and-trade system can provide the needed flexibility to adjust emission allowances in real time, and dynamic regulatory frameworks should be supported to balance emission management with supply chain profitability.

Dynamic Games and Applications Seminar

A general tractable differential game framework with an application to north-south climate policy

Oct 24, 2024   11:00 AM — 12:00 PM

Zoom webinar link

We introduce a differential game framework that retains tractability while not relying on commonly used restrictive linearity assumptions. Our frame is particularly suitable for analytical study the implication of a large set of heterogeneity traits across players. As an illustration, we employ it to derive new insights on climate-related policy. Our framework allows us to characterize emissions, consumption, and welfare across different equilibrium outcomes by comparing the Nash and Stackelberg equilibria of a game capturing climate negotiations between “global north” and a “global south.” We draw various comparisons between such outcomes and the efficient frontier. We find that both the global north and south underinvest in abatement. Stackelberg leadership by the global north reduces emissions and increases welfare over the Nash outcome, although emissions remain far from the optimum. Asymmetric vulnerability to climate change leads to a reversal in emissions, where the less vulnerable country emits more. We employ robust control to study how deep uncertainty affects outcomes.

Dynamic Games and Applications Seminar

Signaling Effort: Information Structures in a Principal-Agent Model

Oct 10, 2024   11:00 AM — 12:00 PM

Zoom webinar link

We consider a principal-agent relationship where only information messages are contractible, and the agent can design a signal about his effort. The principal may have access to an outside signal that escapes the agent’s control and offers a contract based on the joint signal. In equilibrium, the agent’s signal is informative only if the default contract based on the outside signal only exposes him to a severe and likely punishment. We show that an optimal and informative signal provides weak (strong) evidence of high (low) effort. Surprisingly, the principal does not always benefit from more precise outside signals.

(With Arseniy Samsonov.)