International Society of Dynamic Games

Dynamic Games and Applications Seminar

Mitigation, Adaptation and Cooperation in Response to Climate Disaster

Feb 20, 2025   11:00 AM — 12:00 PM (Montreal time)

Hybrid seminar at GERAD or Zoom link

We consider the tradeoff between mitigation and adaptation in a transboundary pollution game with an environmental regime shift. Countries can lower their emissions to decrease the likelihood that a regime shift takes place or proactively invest in adaptive capital to reduce the impact of the regime shift. We solve for the social planner outcome and the Markov Perfect Nash Equilibrium (MPNE) and study how the option to adapt affects incentives to mitigate, precautionary behavior and welfare. In the social planner outcome, adaptation complements mitigation and increases welfare, but in the non-cooperative outcome adaptation crowds out mitigation and lowers welfare. Finally, we introduce efficient procedures to numerically calculate MPNE in differential games that cannot be solved analytically.

Dynamic Games and Applications Seminar

Semiconductor Industry with Recycling and Subsidy

Feb 13, 2025   11:00 AM — 12:00 PM (Montreal time)

Zoom webinar link

This paper examines semiconductor industry in a supply chain context involving a subsidy legislation rewarding end-users for recycling and a return function sensitive to monetary payments. The paper formulates silicon production in upstream industry and semiconductor manufacturing in downstream industry. It characterizes equilibrium outcomes and shows that the subsidy does not distort silicon and semiconductor production and pricing strategies, but enhances returns and contributes to the environment positively by reducing the use of virgin metals and energy.

Dynamic Games and Applications Seminar

Differential games of public investment

Feb 6, 2025   11:00 AM — 12:00 PM (Montreal time)

Zoom webinar link

We define a differential game of dynamic public investment with a discontinuous Markovian strategy space. The best response correspondence for the game is well-behaved: best responses exist and uniquely map almost all profiles of opponents’ strategies back to the strategy space. Our chosen strategy space thus makes the differential game well-formed, resolving a long-standing open problem and allowing the analysis of a wider class of differential games and Markov-perfect equilibria. We provide a ‘cookbook’ necessary and sufficient condition for constructing the best response, and demonstrate its use with a canonical model of non-cooperative mitigation of climate change. Our approach provides novel, economically important results: we obtain the entire set of symmetric Markov-perfect Nash equilibria, and demonstrate that the best equilibria can yield a substantial welfare improvement over the equilibrium which previous literature has focused on. Our methods do not require specific functional forms.