Co-Evolutionary Mechanism of Stakeholders’ Strategies in Comprehensive Agricultural Water Price Reform: The View of Evolutionary Game Based on Prospect Theory

Abstract

In today’s world, the contradiction between water supply and demand is becoming increasingly pronounced, with a particular emphasis on the severe shortage of water for agricultural purposes. As a result, it has become imperative to promote the comprehensive reform of agricultural water pricing and increase water conservation awareness among water users. However, during the actual promotion process, the conflicting interests among stakeholders often create a behavioral game that seriously hinders the effective implementation of the agricultural water price reform. Therefore, it is crucial to address this conflict of interest and find ways to overcome it in order to ensure the successful implementation of the agricultural water pricing reform. In order to explore the dynamic evolution process of the behavior and decision making of the stakeholders in the comprehensive agricultural water price reform and the influencing factors and to propose relevant strategies to effectively promote the reform. This article constructs a three-party game model based on MA-PT theory with the government, farmers, and water supply units as the main subjects, solves the equation with the perceived benefit matrix instead of the traditional benefit matrix, and calculates the objective conditions for reaching the steady state. The simulation results show that the behavioral decision of the game subject to participate in the reform will be influenced by their perception of gains and losses, and there is a mutual influence between the three strategic choices. Therefore, the reform of agricultural water prices should consider the affordability of farmers and water supply units. The government appropriately adopts a reward system to encourage farmers and water supply units to actively participate in the reform to play a positive role and appropriate penalties for promoting the reform, the early realization of the reform goals, and the development of water-saving agriculture.