Abstract We develop a Stackelberg differential game model between a regulator and an oligopoly for “green” innovation. The efficiency improvement of investment on production capacity and pollution abatement R&D with… Click to show full abstract
Abstract We develop a Stackelberg differential game model between a regulator and an oligopoly for “green” innovation. The efficiency improvement of investment on production capacity and pollution abatement R&D with experience accumulating from efficiency-improving learning by doing is taken into account. Our objective is to utilize optimal control theory to investigate the dynamic general equilibrium of Cournot competition and “green” innovation, and derive the steady-state equilibrium properties and optimal investment levels on production capacity and pollution abatement.
               
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