A signaling game approach of siting conflict mediation for the construction of waste incineration facilities under information asymmetry

Abstract

One major challenge for the construction of waste incineration facilities (WIF) is the local opposition from the public, which is commonly known as the not-in-my-back-yard (NIMBY) conflict. In this article, we introduce the signaling game model for the first time to understand how information asymmetry will affect the decision of the public and the incineration plant during the construction of WIFs. The results show that, under the signaling game theoretical framework, the pooling equilibrium is the source of NIMBY conflict, and the imbalance in their respective expected returns plays a key role in this process. On the other hand, driving the game from the pooling equilibrium into the separation equilibrium is an effective approach to resolve NIMBY conflicts. We demonstrate the validity of the proposed framework by numerical simulations based on the results of three before-and-after surveys of locating the WIF in Songjiang district, Shanghai. The successful landing and operation of Songjiang's WIF prove that the effective combination of (1) active pollution reduction by the incinerators, (2) timely information disclosure, and (3) public engagement successfully contributed to the avoidance of the NIMBY conflict. The findings of this study provide insight into the effect of information asymmetry and potential mitigation measures on NIMBY conflicts.