An extended OLG model for solving the Global Commons problem through intergenerational concern

Pica, P. A., de Sousa, M. R. , (2023) , "An extended OLG model for solving the Global Commons problem through intergenerational concern" , 2023 .
Abstract

Udalov (2014) extended a collective goods problem through an Overlapping Generations Model where there is a decision regarding the type of energy use, either fossil fuel versus renewable use energy. Udalov introduced a politico-economic equilibrium contingent on the effort or commitment on renewable energy. We provide his framework but further extended it, by using an eta parameter which provides intergenerational concern among different generations, old versus youngsters. We depart from non-existent Udalov non-concern of intergenerational generations, and extend it to use a parameter – eta – which reflects this concern.
We further provide a game, in the sense of game theory, where the politico economic equilibrium is contingent on the intergenerational concern, which reflects strategic interaction among youngsters and old people. Some politico-economic results at hand. As higher intergenerational concern - eta parameter- a tribute to Stern’s (2004) report, the faster the pace of recuperation of a global common good, the lower level of pollution, and politico-economic equilibria recovers the fastest (m) the investment in renewable energy.