Faculty of Science, Technology and Medicine
Faculty of Law, Economics and Finance
Faculty of Humanities, Education and Social Sciences
Interdisciplinary Centre for Security, Reliability and Trust
Luxembourg Centre for Systems Biomedicine
Luxembourg Centre for Contemporary and Digital History
Luxembourg Centre for European Law
Luxembourg Centre for Socio-Environmental Systems
Environmental game engineering: clearing the air on policies to reduce aviation emissions
Abstract
We develop a game-theoretic framework in order to estimate market equilibria in the presence of environmental policies at both regional and global levels. In a two-stage game, multiple regulators maximize social welfare within their jurisdiction by setting emission charges, while airlines compete through fleet choice, frequencies and fares given the choices of the first-stage regulators. Airline decisions include determining the extent to which environmental charges are absorbed or passed on to consumers and how fleets are upgraded and utilized across the network. The equilibrium outcomes reveal the presence of multiple potential distortions in aviation markets that could undermine the effectiveness of environmental policies. Applying the model to North American, Western European and Trans-Atlantic markets, we find that the most efficient mechanism involves a single regulator employing tax discrimination between regions. However, the analysis shows that welfare improvements may come at the expense of environmental goals because self-interested regulatory interactions limit policy effectiveness.
About the Speaker
Nicole Adler is a Professor of Operations Research and Operations Management at the Hebrew University Business School. Her research focuses on applied game theory, productivity estimation and the economics of transportation markets. She has published in leading journals including Management Science, Operations Research (currently an associate editor), the European Journal of Operational Research, and a wide range of transportation-focused outlets. More recently, her work explores the impacts of disruptive technologies on congestible infrastructure such as roads and public transport systems. Using big data and game theoretic approaches, she has examined how automated vehicles could contribute to the goals of zero fatalities, emissions and congestion, and how regulation can best encourage welfare-enhancing innovation. Prof. Adler has advised international regulators and policymakers on topics ranging from air transport and high-speed rail competition to air traffic control efficiency and airport management, including projects for the OECD International Transport Forum, the European Commission, SESAR, the Israeli Civil Aviation Authority and the Norwegian Department of Transport.
Language
English
This is a free seminar. Registration is mandatory.
Supported by the Fond National de la Recherche,
Luxembourg (19441346)