In this paper, we extend the model in El Ouardighi and Benchekroun (2010) with a dynamic environmental absorption capacity as a two-player dynamic game. We notably compare the open-loop Nash equilibrium with the cooperative solution. Also, the stability of both equilibria is analyzed.
EL OUARDIGHI, F. (2011). A Dynamic Game of Pollution and Environmental Absorption Capacity. In: IFORS 2011 Conference.