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Transboundary Externalities and Reciprocal Taxes: A Differential Game Approach

Charles F. Mason

Strategic Behavior and the Environment2021https://doi.org/10.1561/102.00000100article
AJG 1
Weight
0.39

What the paper says

I investigate the interaction between a country that imports a commodity whose production contributes to a stock pollution from a country that produces that commodity. If the transboundary externality is priced improperly, the application of a tariff or border tax adjustment can provide an indirect policy instrument. But the imposition of such a tariff or tax creates an incentive for the producing country to deploy a domestic pollution tax. This, in turn, creates a strategic interaction between the two countries. Because the externality is linked to a stock pollutant, this strategic interaction will play out over time, which induces a dynamic game. In this modeling context, I describe the nature of the strategic interaction, and characterize the Markov-perfect equilibrium (MPE). Numerical results indicate that MPE can deliver long-run welfare levels similar to the social optimum program, and that the exporting country may be better off in the MPE than in the “business-as-usual” regime.

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https://doi.org/https://doi.org/10.1561/102.00000100

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@article{charles2021,
  title        = {{Transboundary Externalities and Reciprocal Taxes: A Differential Game Approach}},
  author       = {Charles F. Mason},
  journal      = {Strategic Behavior and the Environment},
  year         = {2021},
  doi          = {https://doi.org/https://doi.org/10.1561/102.00000100},
}

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Transboundary Externalities and Reciprocal Taxes: A Differential Game Approach

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Evidence weight

0.39

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.11 × 0.4 = 0.04
M · momentum0.80 × 0.15 = 0.12
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.