Introduce stochastic offset credit requirements for agents

Extend the finite-agent Nash-DQN greenhouse gas offset credit market model to incorporate stochastic, rather than deterministic and exogenous, offset credit compliance requirements for each agent, and analyze how such uncertainty affects optimal policies and the Nash equilibrium.

Background

The model currently assumes each firm’s OC requirement is deterministic and exogenous. The authors note this may not reflect real-world variability and thereby identify stochastic requirements as a worthwhile extension.

Accounting for stochastic compliance needs would increase realism and could materially change equilibrium strategies, risk management, and market outcomes.