The War of Rare Earth Elements: A Dynamic Games Approach

E-print/Working paper (2019)

Rare earth elements govern today’s high-tech world and are deemed to be essential for the attainment of sustainable development goals. Since the 1990s, these elements have been predominantly supplied by ... [more ▼]

Rare earth elements govern today’s high-tech world and are deemed to be essential for the attainment of sustainable development goals. Since the 1990s, these elements have been predominantly supplied by one single actor, China. However, due to the increasing global relevance of their availability, other countries are now encouraged to enter the market. The objective of this paper is to analyze the strategic interactions among (potential) suppliers. In particular, we are interested in (1) the optimal timing for a newcomer (e.g. the U.S.) to enter the market, (2) the incumbent’s (i.e. China’s) optimal behavior, and (3) the cost-efficiency of cooperative vs. competitive market relations. By setting up a continuous-time dynamic game model, we show that (1) the newcomer should postpone the production launch until its rare earth reserves coincide with those of the incumbent, (2) the incumbent should strive for a late market entry and therefore keep its monopolistic resource extraction at the lowest possible level, (3) compared to the payoffs under competition, cooperation leads to a Pareto improvement when started at an early stage. The findings of our model are particularly relevant for the rational strategic positioning of the two great powers, America and China. [less ▲]

The Impact of Unilateral Commitment on Transboundary Pollution

in Environmental Modeling & Assessment (2017)

To reach a common target of environmental quality, countries can choose to commit to a stream of pollution abatement right from the beginning of the game or decide upon abatement at each moment of time ... [more ▼]

To reach a common target of environmental quality, countries can choose to commit to a stream of pollution abatement right from the beginning of the game or decide upon abatement at each moment of time. Though most of the previous literature studies homogeneous strategies where no country or all countries commit to a (same) predefined policy, reality goes along a different way: some countries make more efforts than others to reduce pollutant emission. The main novelty of this paper resides in the introduction of this kind of heterogeneous strategic behavior currently observed among large pollution nations. We find that the pollution level can be lower under heterogeneous than under homogeneous strategies. A stringent environmental quality target will induce the committed player to produce an abatement effort that more than compensates the free-riding attitude of the non-committed player. [less ▲]

Réformes fiscales et du droit des affaires en Afrique subsaharienne. Quel impact sur la mobilisation des recettes fiscales ?

in Hiez, David; Menetrey, Séverine (Eds.) L'effectivité du droit économique dans l'espace OHADA (2016)

Hurricane Damage Risk Assessment in the Caribbean: An Analysis using Synthetic Hurricane Events and Nightlight Imagery

Scientific Conference (2014, July 13)

Pollution and child mortality: the case of tropospheric ozone in sub-Saharan Africa

Presentation (2014, May 13)

Carbon capture and storage and transboundary pollution: A differential game approach

in European Journal of Operational Research (2014)

We study the strategic behavior of two countries facing transboundary CO2 pollution under a differential game setting. In our model, the reduction of CO2 concentration occurs through the carbon capture ... [more ▼]

We study the strategic behavior of two countries facing transboundary CO2 pollution under a differential game setting. In our model, the reduction of CO2 concentration occurs through the carbon capture and storage process, rather than through the adoption of cleaner technologies. Furthermore, we first provide the explicit short-run dynamics for this dynamic game with symmetric open-loop and a special Markovian Nash strategy. Then, we compare these strategies at the games’ steady states and along some balanced growth paths. Our results show that if the initial level of CO2 is relatively high, state dependent emissions reductions can lead to higher overall environmental quality, hence, feedback strategy leads to less social waste. [less ▲]

Pollution and child mortality: the case of tropospheric ozone in sub-Saharan Africa

Scientific Conference (2013, July)

Deregulation shock in product market and unemployment

in Journal of Economic Dynamics & Control (2013), 37(4), 711-734

In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search ... [more ▼]

In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive margin. We find numerically that a model with endogenous labor force participation decision produces a decline in the unemployment rate which is almost three times larger than that in a model with fixed labor force. For a calibration capturing alternatively the European and the US labor markets, a deregulation episode, which lowers the markup by 3 percentage points, results in a fall in the unemployment rate by 0.17 and 0.05 percentage point, respectively, while the labor share is almost unaffected in the long-run. The sensitivity analysis reveals that product market deregulation is more effective in countries where product and labor market regulations are high, unemployment benefits are small and labor force is more responsive. [less ▲]

EXPLORING THE LINK BETWEEN LOCAL AND GLOBAL KNOWLEDGE SPILLOVERS: Evidence from Plant-Level Data

in Scandinavian Journal of Economics (2012)

We investigate the existence of local (i.e. within-country) and global (i.e. between-country) knowledge spillovers within a single analytical framework. Our analysis is based on an exhaustive database on ... [more ▼]

We investigate the existence of local (i.e. within-country) and global (i.e. between-country) knowledge spillovers within a single analytical framework. Our analysis is based on an exhaustive database on Irish manufacturing plants covering the period 1986-1994 and focuses on the impact of R\&D spillovers on productivity. Our results show that while the R\&D undertaken by multinationals active in Ireland has had no significant impact on local plants’ productivity, these multinationals have, nevertheless, through their presence, favoured the diffusion of global R\&D spillovers. We furthermore show that while domestic plants benefited from R\&D spillovers emanating from other domestic firms, these spillovers had a much more limited spatial scope compared to multinational-presence induced spillovers. Foreign affiliates in turn, have directly gained from the size of the R\&D stock in their origin country, but there is no evidence that foreign affiliates located in Ireland had benefited from local R\&D spillovers. [less ▲]

Trends in Rainfall and Economic Growth In Africa: A Neglected Cause of the African Growth Tragedy

in Review of Economics and Statistics (2010), 92(2), 350-366