The irreversible pollution game

We investigate the extent to which irreversibility of pollution shapes free-riding problems inherent in (differential) games. To this end, we use two-country differential Irreversibility is a hard type: While strictly positive and concave below certain threshold level pollution, decay drops zero above threshold. Assuming that damage function preferences are quadratic, first examine both cooperative non-cooperative versions game. innovate analytically demonstrating existence Markov perfect equilibria (MPE) characterizing these. Second, demonstrate when players face same costs (symmetry), irreversible regimes more frequently reached than under cooperation, evaluate penalty stemming from absence cooperation. Incidentally, prove open-loop Nash lead reach regime MPE our setting. Third, study implications asymmetry cost. find for equal total costs, asymmetric produce lower emission rate symmetric some mild conditions, thereby driving system less latter. Finally, provided cases, long-term greater case, reflecting intensive symmetry.