CES Economic Theory Seminar


The Economic Theory workshop is a weekly seminar taking place on fridays 12-13h at the Maison des Sciences Economiques (106-110 Boulverd de l'Hopital). This seminar is a venue for theoretical work in Economics and for work drawing on quantitative methods in Economics. Defined by an approach rather than by a specific theme, the topics of the seminar can concern a variety of areas in Economics, such as (non exhaustively), micro economics, game theory, mathematical economics, decisions theory, finance or macro economics. The seminar functions as an internal workshop but also regularly greets speakers from other institutions.

Organizers: Anna Bogomolnaia, Hervé Moulin, Emily Tanimura

If you want to be added to the seminar mailing list, or for any other query about the Economic Theory seminar, please feel free to contact Emily Tanimura (emily(dot)tanimura(at)univ-paris1(dot)fr).

You can add the calendar to your google calendar with the following link:

  • https://calendar.google.com/calendar?cid=bnNpYXFkdHFncmFiYTV1bWhqcGE0c2VrbDBAZ3JvdXAuY2FsZW5kYXIuZ29vZ2xlLmNvbQ

It is supported by the Centre d'économie de la Sorbonne, CNRS and Université Paris 1 Panthéon-Sorbonne.

  • Friday, October 23rd, 2020 Room 114

Raouf Boucekine (AMSE )

Title : A dynamic theory of spatial externalities

Abstract :

In this paper, we revisit the theory of spatial externalities. In particular, we depart in several respects from the important literature studying the fundamental pollution free riding problem uncovered in the associated empirical works. First, instead of assuming ad hoc pollution diffusion schemes across space, we consider a realistic spatiotemporal law of motion for air and water pollution (diffusion and advection). Second, we tackle spatiotemporal non-cooperative (and cooperative) differential games. Precisely, we consider a circle partitioned into several states where a local authority decides autonomously about its investment, production and depollution strategies over time knowing that investment/production generates pollution, and pollution is transboundary. The time horizon is infinite. Third, we allow for a rich set of geographic heterogeneities across states while the literature assumes identical states. We solve analytically the induced non-cooperative differential game under decentralization and fully characterize the resulting long-term spatial distributions. We further provide with full exploration of the free riding problem, reflected in the so-called border effects. In particular, net pollution flows diffuse at an increasing rate as we approach the borders, with strong asymmetries under advection, and structural breaks show up at the borders. We also build a formal case in which a larger number of states goes with the exacerbation of pollution externalities. Finally, we explore how geographic discrepancies affect the shape of the border effects.

  • Friday, October 30th

  • University holidays: no seminar