Sustainable Cooperation in a Bicriteria Game of Renewable Resource Extraction

We study a problem of sustainable cooperation in multi-objective dynamic game of renewable resource extraction where the players seek to maximize simultaneously two separate objectives (one has economic sense; the other describes the players’ environmental concern). Using the weighted game approach and dynamic programming method we derive the cooperative non-stationary strategies and study how the individual rationality property of the simple cooperative solution depends on the level of the players’ asymmetry. Further we introduce a mechanism for sustainable cooperation based on the specific payoff distribution procedure and prove that corresponding MCP-cooperative solution satisfies both the subgame individual rationality and the efficiency constraint. The results are illustrated with a numerical example