Cost-Sharing Mechanism of Water Pollution Control in Main and Subbasins Based on Stackelberg Game Model

Abstract

Faced with goal to improve ecological environment, water pollution treatment in river basins has been one of research focuses in recent years. Based on the basic characteristics of the river basins including main stream and multiple or multilevel tributaries, considering competitive relationship and cost-sharing mechanism of water pollution control, a differential game model of pollution elimination including main stream government and two tributary governments was constructed, and the equilibrium strategies under two situations of noncooperation mechanism and cost-sharing mechanism were discussed. The results show that Stackelberg game model based on cost-sharing mechanism can improve the pollution elimination effect and achieve Pareto improvement of the environment and economy. Then, through numerical analysis, influence of factors such as competition coefficient on pollutant elimination effect, tripartite effort, and optimal cost-sharing ratio were discussed. The results show that, in order to effectively reduce pollutant and improve environmental benefits, the greater pressure on tributary governments to develop the economy and the smaller degree of pollution treatment efforts, the more cost-sharing mechanism needed, and the higher main stream government’s cost-sharing proportion to the tributary government. When the pollution eliminating-quantity on unit effort of one tributary government increases, the revenue of main stream and tributary governments will increase; simultaneously, when the effort degree of the tributary government increases, the other decreases. The optimal cost-sharing proportions of main stream government to two tributaries are different which is influenced by many factors, and the influence rule presents stable monotonic increase or decrease. The research conclusions can provide reference for the governments to negotiate and determine cost-sharing mechanism.