Differential Game-Theoretic Models of Cournot Oligopoly with Consideration of the Green Effect

Abstract

We built and investigated analytically and numerically a differential game model of Cournot oligopoly with consideration of pollution for the general case and the case of symmetrical agents. We conducted a comparative analysis of selfish agents’ behavior (a differential game in normal form), their hierarchical organization (differential Stackelberg games), and cooperation (optimal control problem) using individual and collective indices of relative efficiency. The same analysis wasperformed for the models with the green effect when players chose both output volumes and environmental protection efforts. We used the Pontryagin maximum principle for analytical investigation and the method of qualitatively representative scenarios in simulation modeling for numerical calculations. This method allows for reducing the number of computer simulations, providing sufficient precision. As a result of the comparative analysis, systems of collective and individual preferences were obtained.