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Int. J. Environ. Res. Public Health 2016, 13(6), 622; doi:10.3390/ijerph13060622

Pricing Mechanism Design for Centralized Pollutant Treatment with SME Alliances

1
College of Computer and Information Science, Chongqing Normal University, Chongqing 400047, China
2
College of Economics and Business Administration, Chongqing University, Chongqing 400044, China
3
College of Mechanical Engineering, Chongqing University, Chongqing 400044, China
*
Author to whom correspondence should be addressed.
Academic Editor: Ulf-G. Gerdtham
Received: 17 March 2016 / Revised: 22 May 2016 / Accepted: 16 June 2016 / Published: 22 June 2016
View Full-Text   |   Download PDF [336 KB, uploaded 22 June 2016]

Abstract

In this paper, we assume that a professional pollutant treatment enterprise treats all of the pollutants emitted by multiple small and medium-sized enterprises (SMEs). In order to determine the treatment price, SMEs can bargain with the pollutant treatment enterprise individually, or through forming alliances. We propose a bargaining game model of centralized pollutant treatment to study how the pollutant treatment price is determined through negotiation. Then, we consider that there is a moral hazard from SMEs in centralized pollutant treatment; in other words, they may break their agreement concerning their quantities of production and pollutant emissions with the pollutant treatment enterprise. We study how the pollutant treatment enterprise can prevent this by pricing mechanism design. It is found that the pollutant treatment enterprise can prevent SMEs’ moral hazard through tiered pricing. If the marginal treatment cost of the pollutant treatment enterprise is a constant, SMEs could bargain with the pollutant treatment enterprise individually, otherwise, they should form a grand alliance to bargain with it as a whole. View Full-Text
Keywords: centralized pollutant treatment; pricing mechanism; small and medium-sized enterprises (SMEs); SME alliances; moral hazard; bargaining game centralized pollutant treatment; pricing mechanism; small and medium-sized enterprises (SMEs); SME alliances; moral hazard; bargaining game
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Li, Y.; Huang, B.; Tao, F. Pricing Mechanism Design for Centralized Pollutant Treatment with SME Alliances. Int. J. Environ. Res. Public Health 2016, 13, 622.

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