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ETNA - Electronic Transactions on Numerical Analysis
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Verlag der Österreichischen Akademie der Wissenschaften Austrian Academy of Sciences Press
A-1011 Wien, Dr. Ignaz Seipel-Platz 2
Tel. +43-1-515 81/DW 3420, Fax +43-1-515 81/DW 3400 https://verlag.oeaw.ac.at, e-mail: verlag@oeaw.ac.at |
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DATUM, UNTERSCHRIFT / DATE, SIGNATURE
BANK AUSTRIA CREDITANSTALT, WIEN (IBAN AT04 1100 0006 2280 0100, BIC BKAUATWW), DEUTSCHE BANK MÜNCHEN (IBAN DE16 7007 0024 0238 8270 00, BIC DEUTDEDBMUC)
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ETNA - Electronic Transactions on Numerical Analysis, pp. 100-112, 2020/02/05
In this paper, we present a stochastic differential game to model the transboundary air pollution problems of the Beijing-Tianjin region with emission permits trading. By using stochastic optimal control theory, we obtain the Hamilton-Jacobi-Bellman equation satisfied by the value function for the cooperative games. Next, we solve the Hamilton-Jacobi-Bellman equation by using a fitted finite volume method. Finally, the efficiency and the usefulness of the fitted finite volume method are illustrated by an empirical study.
Keywords: transboundary air pollution of the Beijing-Tianjin region, stochastic differential game, emission permits trading, Hamilton-Jacobi-Bellman equation, fitted finite volume method