Information asymmetry in the graph model of conflict resolution and its application to the sustainable water resource utilization conflict in Niangziguan Springs Basin

Abstract

With the increasing consumption of global water resources, research on sustainable water resource utilization has become a topic of urgent interest. Despite the promulgation of policies and laws on the protection of water resources, the sustainable utilization and development of water resources in China are still far from reaching their initially established targets. This is partly explained by real-life conflicts that arise, in which different decision makers (DMs) possess different levels of professional knowledge, social status, and even power in contexts where the parties’ ability to leverage information varies greatly. Sustainable water resource utilization conflicts between the government and factories exemplify the impact of this information asymmetry on the relationship between DMs for the purposes of conflict resolution. In this paper, it is assumed that if one DM in a conflict has more information, their information advantage will affect the policy formation of the other DM. Thus, to analyze and resolve relevant problems, the concept of information asymmetry between two DMs is integrated into the basic structure of the graph model for conflict resolution (GMCR). According to the mathematical expression of the information asymmetry preferences of DMs, a set of information asymmetry stability definitions can be introduced to determine the stable state for each DM. The sustainable water resource utilization conflict in Niangziguan Springs Basin is used as an exemplar to confirm the effectiveness and correctness of the proposed method. Stability analysis shows that when the government implements strict environmental policies by leveraging more information, factories should adjust their preference relations to follow the rules and regulations to protect water resource in practice. Finally, comprehensive sustainable utilization and development of natural resource mechanisms must be implemented not only for these factories but also for other industries in China.