Articles
Investment Option Game for Controlling Global Stock Pollution under Uncertainty
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AuthorHojeong Park (Korea University)
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Year2011
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VolumeVol.27
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NumberNo.1
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Stock pollution involves a tradeoff between irreversible environmental impacts and
investment costs. Such a tradeoff creates opposing incentives between early- and late-policy
adoptions to reduce stock pollution emissions. Earlier studies consider the effects of the
uncertainty of environmental impacts on investment timing. This paper extends these studies
by considering interactions between two players in order to abate stock pollution. When the
uncertainty of environmental damage exists, the absence of cooperative policy may result in
further environmental damage because the irreversibility of investments dominates that of
environmental damages. -
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