Abstract
City management involves complex interactions between the manager (administrator), who supervises urban appearance and environmental sanitation, and the managed (speculator), who works in urban areas and is subject to management ordinances. This article provides an iterated game framework for analyzing the extent to which zero-determinant strategies can be used to optimize the intensity decision of supervisory action against municipal code violations, thus enhancing administrative efficiency. To account for characteristics of the public affairs context, it is assumed that each player in our model chooses from a finite set of discrete and random courses of game strategy. As our model constitutes a major extension to the seminal Press and Dyson (2012) model, we resort to the theory of stochastic process to prove the existence of multiple zero-determinant strategies when players can adopt many strategies in the iterated game. Various numerical examples are presented to validate such strategies’ optimality. Our finding is that, given the probability of adopting a particular strategy, an urban administrator can unilaterally (i) set the speculators’ expected payoff to a level equaling to the opportunity cost of abiding by the law and (ii) let their own expected surplus payoff exceed the speculators. Finally, important policy implications can be derived based on these analyses and conclusions.
Highlights
With the aiming of reducing the negative externality of individual behavior, urban public management involves using administrative inspection and supervision approaches to improve different aspects of urban public life including the environmental quality, city appearance, public health, and smoothness of traffic flow. e ideal practices for the management of urban areas can be accomplished through good cooperation between speculators exhibiting spontaneous law-abiding behaviors and the administrator performing monitoring duties without coercive enforcement
Many studies have attempted to address these questions from the perspective of the classic Nash equilibrium [1] and evolutionary game theory [2]. e research in applications of game theory concludes that defection will eventually happen in games like our urban administration setup and that selfish behavior exhibited by the majority of the population will disadvantage selfish speculators themselves as much as it will hurt those managers they are acting against
A clean and tidy urban environment is crucial for sustainable economic growth and better living conditions. e municipal government’s regulations promulgated and decisions on how to enforce them would directly determine the efficiency of urban public management in securing the desired environment and attaining other indirect economic and social goals
Summary
With the aiming of reducing the negative externality of individual behavior, urban public management involves using administrative inspection and supervision approaches to improve different aspects of urban public life including the environmental quality, city appearance, public health, and smoothness of traffic flow. e ideal practices for the management of urban areas can be accomplished through good cooperation between speculators exhibiting spontaneous law-abiding behaviors and the administrator performing monitoring duties without coercive enforcement. Erefore, we have constructed a new game theory model in which the players are the administrator and the speculator, and these two types of players can choose multiple different strategies according to varying supervision intensities for each round of the game In this model, the player’s choice of one strategy can be regarded as a Markov process, and there exists a state transferring probability matrix that determines the long-term payoffs of players in this iterated process. Study the iterated urban public management game and apply a novel policy implementation mechanism based on the ZD strategy which empowers us with a strong ability to control the payoffs of speculators and improve their cooperation
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