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  4. A Robust Noncooperative Meta-Game for Climate Negotiation in Europe
 
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conference paper

A Robust Noncooperative Meta-Game for Climate Negotiation in Europe

Babonneau, Frédéric Louis François  
•
Haurie, Alain
•
Vielle, Marc  
2016
Advances in Dynamic and Evolutionary Games
Symposium of the International-Society-of-Dynamic-Games (ISGD)

In this paper we define and solve a ‘robust game design’ problem that could be used to assess the fair sharing of the abatement burden among the 28 EU countries in their coming climate negotiations. The problem consists in finding a distribution of a global ‘safety emission budget’ for the panning period 2010–2050, among the 28 countries in such a way to obtain a balanced relative loss of welfare (computed in percent of the discounted consumption in the reference case) when the countries supply strategically their permit endowment on a permit trading system with full banking and borrowing. We assume that the countries play a noncooperative game, where the payoffs are constituted of the gains from the terms of trade plus the gains in the permit trading and minus the abatement cost, expressed as the compensative variation of income. These payoff functions are estimated from an ensemble of numerical simulations of a detailed CGE model, GEMINI-E3 representing the economic interactions among the 28 EU countries. To deal with the uncertainty introduced by the statistical emulation technique we propose to use the concept of robust equilibrium, where the results of robust optimization are exploited in the definition of an equilibrium solution, when the payoff is subject to uncertainties. A numerical illustration is performed and an interpretation of the impact of the robustification approach on the solution of the game design problem is provided.

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Type
conference paper
DOI
10.1007/978-3-319-28014-1_15
Web of Science ID

WOS:000389946800015

Author(s)
Babonneau, Frédéric Louis François  
•
Haurie, Alain
•
Vielle, Marc  
Date Issued

2016

Publisher

Birkhauser Boston

Publisher place

Cambridge

Journal
Advances in Dynamic and Evolutionary Games
ISBN of the book

978-3-319-28014-1

978-3-319-28012-7

Total of pages

19

Series title/Series vol.

Series Annals of the International Society of Dynamic Games; 14

Start page

301

End page

319

Subjects

Game Theory

•

Robust optimization

•

Meta-game

•

Climate negotiation

Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
LEURE  
Event nameEvent placeEvent date
Symposium of the International-Society-of-Dynamic-Games (ISGD)

Amsterdam, NETHERLANDS

JUL 09-12, 2014

Available on Infoscience
September 26, 2014
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/107058
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