Co-écrit avec Giorgio Fabbri, Salvatore Federico et Fausto Gozzi

Abstract

Spatiotemporal dynamics arise quite naturally in several areas in economic theory, in particular in environmental economics. However, it’s only in the last years that these systems, which are inherently infinite dimensional, have been analytically tackled in the economic literature. In this (surprisingly) non-technical presentation, we develop a new frame allowing for analytical exploration. This includes optimal control and differential games. We focus on applications to the control of the natural diffusion of pollution across continuous over infinite time horizon, and especially, on the dynamic game extensions to characterize the shape of spatial externalities at Nash equilibria.