International Society of Dynamic Games

Dynamic Games and Applications Seminar

Environmental policy and industrial allocation. Transboundary pollution in economic geography models.

May 15, 2026   11:00 AM — 12:00 PM (Montreal time)

This hybrid seminar will take place at HEC Montréal, room Salle Port-au-Prince (green), or Zoom (link)

We examine the impact of environmental policy on industrial location between two trading regions dealing with transboundary pollution. Firstly, we study how the distribution of firms and trade costs affect the governments’ environmental policies, particularly, the issuance of emission permits. Secondly, we study how the resulting environmental policies alter the allocation of the industry. The microeconomic behavior of the agents is framed within the Economic Geography literature, through a linear Footloose Capital (FC) model. The macroeconomic model that arises is a transboundary pollution dynamic game. When regions have different industrial shares, we find that if pollution damage is low, the more industrialized region adopts environmentally irresponsible behavior by increasing the offer of emission permits, which reduces their price. Firms benefit from lower production costs, ultimately attracting more firms (agglomeration force). However, due to transport costs, as the share of firms in a region increases, the benefits decrease (dispersion force). The final spatial distribution of the industry between the regions depends on the balance between agglomeration and dispersion forces. This agglomerative force and the governments’ strategic behavior, absent in the FC model, could lead to industrial activity fully concentrating in a core region. As pollution damage increases, agglomerative power loses strength.

Dynamic Games and Applications Seminar

Electricity Systems Without a Reliable Grid: A Multi-Lens Analysis of Investment, Markets, and Planning

May 7, 2026   11:00 AM — 12:00 PM (Montreal time)

Zoom webinar link

In contexts of persistent grid unreliability, electricity systems evolve through the decentralized and often uncoordinated adoption of individual and community-level solutions. This talk analyzes such systems through complementary analytical lenses: optimal community-level investments under uncertain grid access, market dynamics in decentralized microgrids under weak regulation, and centralized planning with strategic consumers. Linking these lenses reveals how unreliability challenges conventional approaches to coordination, planning, and system design.

Dynamic Games and Applications Seminar

Progressive taxes in groundwater regulation: a differential game

Apr 30, 2026 11:00 AM — 12:00 PM (Montreal time)

Zoom webinar link

In this paper, we investigate optimal regulation to manage a groundwater extraction problem through a leader–follower differential game. A water agency, acting as the leader, selects two policy instruments, a water tax and a water threshold, to control withdrawals and preserve the aquifer. Farmers, as followers, determine their optimal extraction levels given the water agency’s policy. We compare scenarios in which the regulator controls both instruments with more restrictive cases. We show that a linear–progressive tax scheme strictly dominates linear taxation in terms of aquifer preservation and social welfare. Moreover, allowing feedback adjustment of the water threshold performs close to the fully flexible benchmark.