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Sustainability 2015, 7(5), 4952-4972; doi:10.3390/su7054952

Game Analysis and Simulation of the River Basin Sustainable Development Strategy Integrating Water Emission Trading

1
College of Management and Economics, Tianjin University, Tianjin 300072, China
2
School of Environmental Science and Engineering, Tianjin University, Tianjin 300072, China
3
School of Environmental and Chemical Engineering, Tianjin Polytechnic University, Tianjin 300387, China
*
Author to whom correspondence should be addressed.
Academic Editor: Marc A. Rosen
Received: 8 January 2015 / Revised: 11 April 2015 / Accepted: 20 April 2015 / Published: 24 April 2015
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Abstract

Water emission trading (WET) is promising in sustainable development strategy. However, low participation impedes its development. We develop an evolutionary game model of two enterprise populations’ dynamics and stability in the decision-making behavior process. Due to the different perceived value of certain permits, enterprises choose H strategy (bidding for permit) or D strategy (not bidding). External factors are simplified according to three categories: rH-bidding related cost, G-price and F-penalty. Participation increase equals reaching point (H,H) in the model and is treated as an evolutionarily stable strategy (ESS). We build a system dynamics model on AnyLogic 7.1.1 to simulate the aforementioned game and draw four conclusions: (1) to reach ESS more quickly, we need to minimize the bidding related cost rH and price G, but regulate the heavy penalty F; (2) an ESS can be significantly transformed, such as from (D,D) to (H,H) by regulating rH, G and F accordingly; (3) the initial choice of strategy is essential to the final result; (4) if participation seems stable but unsatisfying, it is important to check whether it is a saddle point and adjust external factors accordingly. The findings benefit both water management practice and further research. View Full-Text
Keywords: water allocation; river basin management; sustainable development strategy; emission trading; evolutionary game model; system dynamics simulation water allocation; river basin management; sustainable development strategy; emission trading; evolutionary game model; system dynamics simulation
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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

Liu, L.; Feng, C.; Zhang, H.; Zhang, X. Game Analysis and Simulation of the River Basin Sustainable Development Strategy Integrating Water Emission Trading. Sustainability 2015, 7, 4952-4972.

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