dc.contributor.author | Mathiesen, Lars | |
dc.date.accessioned | 2008-11-06T08:55:35Z | |
dc.date.available | 2008-11-06T08:55:35Z | |
dc.date.issued | 2008-06 | |
dc.identifier.issn | 0804-6824 | |
dc.identifier.uri | http://hdl.handle.net/11250/163146 | |
dc.description.abstract | In the traditional Cournot model producers influence each other’s decisions through revenue earned in the product market. Rosen (1965) introduced the notion of a coupled constraints equilibrium which allowed players to affect their rivals’ strategy space as well. Krawczyk (2005) applied this idea to the regulation of environmental pollution where a cap on aggregate
emissions implies a constraint across firms’ activity levels. He solved the model with a
diagonalization algorithm obtaining linear convergence. We formulate this problem as a
complementarity problem and apply a Newton algorithm obtaining a quadratic convergence.
We show that the conditions under which this model has a unique solution and the algorithm
computes the solution are analogous to those for the traditional Cournot model. | en |
dc.language.iso | eng | en |
dc.publisher | Norwegian School of Economics and Business Administration. Department of Economics | en |
dc.relation.ispartofseries | Discussion paper | en |
dc.relation.ispartofseries | 2008:12 | en |
dc.title | Regulation of pollution in a Cournot equilibrium | en |
dc.type | Working paper | en |
dc.subject.nsi | VDP::Samfunnsvitenskap: 200::Økonomi: 210::Samfunnsøkonomi: 212 | en |