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Alex, Fabian

Green central banking and game theory: The Chicken Game-approach

Alex, Fabian (2024) Green central banking and game theory: The Chicken Game-approach. Economic Systems 48 (4), S. 101251.

Veröffentlichungsdatum dieses Volltextes: 03 Dez 2024 09:25
Artikel
DOI zum Zitieren dieses Dokuments: 10.5283/epub.59730


Zusammenfassung

This paper investigates the determinants of the probability that a central bank chooses to make its financial sector green. We derive a mixed-strategy Nash equilibrium from a strategic setting of two monetary authorities choosing simultaneously between the alternatives of greening and conducting business as usual. Using a very general setup, we obtain a model that nests most of the usual 2 × ...

This paper investigates the determinants of the probability that a central bank chooses to make its financial sector green. We derive a mixed-strategy Nash equilibrium from a strategic setting of two monetary authorities choosing simultaneously between the alternatives of greening and conducting business as usual. Using a very general setup, we obtain a model that nests most of the usual 2 × 2-situations in game theory. “Green” avoids a country’s contribution to an externality experienced by both, but also encompasses a sacrifice of slowing down economic performance. The probability of greening is found to decrease whenever “greening” means a larger sacrifice for the other country, while it increases with the size of both countries, the rate of internalization applied to the externality as well as the severity of this externality. Unlike the typical (pure) free-riding approach to international coordination on environmental issues, we find some willingness of countries to sacrifice wealth for the sake of avoiding a worst case. In a repeated setting, cooperative solutions can be established. The influence of discounting on the stability of these solutions is ambiguous.



Beteiligte Einrichtungen


Details

DokumentenartArtikel
Titel eines Journals oder einer ZeitschriftEconomic Systems
Verlag:Elsevier
Band:48
Nummer des Zeitschriftenheftes oder des Kapitels:4
Seitenbereich:S. 101251
Datum16 August 2024
InstitutionenWirtschaftswissenschaften > Institut für Volkswirtschaftslehre und Ökonometrie
Identifikationsnummer
WertTyp
10.1016/j.ecosys.2024.101251DOI
Klassifikation
NotationArt
C72Journal of Economics Literature Classification
Q5Journal of Economics Literature Classification
Stichwörter / KeywordsEnvironment, Environmental economics, Green economics, Game theoretic, Game theory, Games, Mixed strategy, Two player, Public goods game, Strategic game
Dewey-Dezimal-Klassifikation300 Sozialwissenschaften > 330 Wirtschaft
StatusVeröffentlicht
BegutachtetJa, diese Version wurde begutachtet
An der Universität Regensburg entstandenJa
URN der UB Regensburgurn:nbn:de:bvb:355-epub-597300
Dokumenten-ID59730

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