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Energies 2016, 9(6), 455; doi:10.3390/en9060455

A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain

1
School of Economics and Management, Kochi University of Technology, 2-22 Eikokuji-cho, Kochi City, Kochi 780-8515, Japan
2
Graduate School of Engineering, Kochi University of Technology, Miyanokuchi 185, Tosayamada-cho, Kami City, Kochi 782-0003, Japan
*
Author to whom correspondence should be addressed.
Academic Editor: Calliope Panoutsou
Received: 13 April 2016 / Revised: 23 May 2016 / Accepted: 6 June 2016 / Published: 14 June 2016
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Abstract

The rapid expansion of the biomass power generation industry has resulted in the conversion of substantial agricultural waste (crop straw) into energy feedstock, thereby increasing the income of farmers and promoting the development of rural areas. However, the promising industry faces financial deficits because of difficulties in collecting straw from farmers. To determine strategies for overcoming the biomass supply problem, we apply Stackelberg game theory in modeling the Chinese biomass supply chain and design incentive scenarios under stakeholder risk perception. We illustrate the proposed methodology through an empirical case study on China and demonstrate the effects of incentives on farmers and middlemen. Results show that with incentives, straw quantity and stakeholder profit are expected to increase. Incentives exert a particularly remarkable effect on farmers, with such inducements producing the highest social welfare. Moreover, perceived risk dramatically affects stakeholder profit. Mitigating the risk perception of farmers is expected to significantly advance the development of the biomass power generation industry, increase stakeholder profit, and decrease the amount of incentives needed. View Full-Text
Keywords: supply chain; biomass power plant; stackelberg game theory; perceived risk supply chain; biomass power plant; stackelberg game theory; perceived risk
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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Wang, L.; Watanabe, T. A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain. Energies 2016, 9, 455.

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