Abstract
We consider an asymmetric differential game of pollution control with a developing country and two developed countries. The developing country is invulnerable to the pollution in contrast to the developed ones. Assuming partial cooperation, we examine all coalition structures composed by three players and provide the stability conditions for them using two approaches: (i) Nash stability, (ii) individual stability. First, the case of nontransferable payoffs is examined. Second, a transfer payment scheme is proposed to make particular coalition structures stable.
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