Reference

Franz Wirl (Université de Vienne), Global Warming and Heterogeneous (Green and Brown) Consumers, Environment Economics Seminar, Toulouse : TSE, May 17, 2010, 11:00–12:30, room MF 323.

Abstract

This paper considers a familiar dynamic tragedy of the commons (‘global warming’) and investigates whether and by how much green polluters can mitigate such tragedies. Green consumers feel penalized (‘pain’) for any consumption in excess of the social optimum, which can arise e.g., from Kant’s morale imperative. In addition the interplays among and between green and brown consumers are investigated as differential games. Green preferences, heterogeneity of consumers and the irreversibility of emissions lead to discontinuous strategies, a number non-trivial and even puzzling features.

JEL codes

  • C61: Optimization Techniques • Programming Models • Dynamic Analysis
  • C62: Existence and Stability Conditions of Equilibrium