Using three-sided dynamic game model to study regional cooperative governance of haze pollution in China from a government heterogeneity perspective

Abstract

This paper constructs a three-sided dynamic game model of the regional cooperative governance of haze pollution in China from a government heterogeneity perspective. By analysing the mixed strategy Nash equilibrium from game theory, this study explores the feasible mechanisms and the necessary conditions to establish a cooperative model, as well as effective ways for Superior Government to improve administrative efficiency. As evidenced in the results, due to the heterogeneity of governments and “free-riding” behaviours, a stable cooperative model cannot be spontaneously generated between two heterogeneous local governments, so the Superior Government is compelled to supervise the two parties and punish the non-cooperative ones. At the same time, the Superior Government can improve the efficiency of the supervision mechanism by increasing the penalty for non-cooperative parties and reducing the conflict cost when local governments are non-cooperative. The biggest innovation of this paper is to describe efficiency from the perspective of probability. The probability is calculated by the ratio of input to output. If the output—stable cooperation between local governments—is constant, then the less input—the cost of supervision, the higher the efficiency of the mechanism.