Non-cooperative Decision-making Research Articles

Carbon emission reductions, pricing and social welfare of three-echelon supply chain considering consumer environmental awareness under carbon tax policy

With the rapid growth in carbon emissions from transport, reducing these emissions is becoming as important as reducing emissions from production. We took a transporter as a member of the supply chain system and constructed a three-echelon supply chain composed of a manufacturer, transporter, and retailer. This study applies the Stackelberg game and Nash game to research the optimal carbon emission reductions, pricing, and social welfare when the government imposes a carbon tax on carbon emitters and consumers are environmentally conscious. The four scenarios were designed as follows: 1) non-cooperative decision-making (NN model), in which neither carbon emission reduction cooperation nor pricing cooperation takes place; 2) local-cooperative decision-making Ⅰ (CN model), in which only cooperation in the field of carbon emission reductions takes place; 3) local-cooperative decision-making Ⅱ (NC model), in which cooperation in the field of pricing without cooperation in the area of carbon emission reductions takes place; and 4) overall-cooperative decision-making (CC model), in which both cooperation in the field of carbon emission reductions and cooperation in the area of pricing take place. The results show that economic (as profit of the supply chain system), social (as pricing and social welfare), and environmental benefits (as the optimal carbon emission reductions) for the three-echelon supply chain will improve with the deepening of cooperation among the supply chain members. Carbon tax policies have different impacts on clean and polluting supply chains. High carbon tax can encourage clean supply chain to increase carbon emission reduction, but will lead to the reduction of carbon emission of polluting supply chain. A cross-shareholding contract is designed to coordinate the supply chain and achieve the optimal state of the overall cooperative decision. Finally, the paper provides suggestions on carbon emission reductions for enterprises and policymaking for the government.

Research on mechanisms to incentivize corporate environmental responsibility based on a differential game approach.

As major polluters, enterprises are expected to behave responsibly toward the natural environment. However, enterprises often do not pay enough attention to the environment and may even be environmentally irresponsible. Encouraging enterprises to actively accept environmental responsibility is the key to solving the problem of environmental pollution. This paper uses a differential game model to study the impact of different governmental incentive mechanisms on corporate environmental responsibility (CER). The results of the study show that independent, noncooperative decision-making by the government and the enterprise is not desirable. If the government provides a monetary incentive to the enterprise or sets a corporate pollution threshold to stimulate enterprises' acceptance of environmental responsibility, environmental quality can be improved. These results lead to useful policy recommendations and a scientific basis for environmental governance, which is expected to be helpful for finding ways to balance economic development and environmental protection in developing countries more generally.

Multi-agent management of integrated food-energy-water systems using stochastic games: from Nash equilibrium to the social optimum

System-level integration and optimization of food-energy-water systems (FEWS) require coordination of multiple agencies and decision-makers and incorporating their interdependence. In general, such coordination might be hard to achieve. As a result, the literature on FEWS management either optimizes the operations for one sector (or one decision-maker), or models interdependence among the sectors without optimizing their operations. In this article, we develop a novel multi-agent management optimization approach that is able to incorporate stochasticity and uncertainty in the system’s dynamics and interdependence of the water and energy resources for food production. The proposed method is the first attempt to utilize fundamentals of decision and game theories to optimize operations of multi-agent FEWS. We specifically focus on differentiating between (1) cooperative decision optimization of the operations, where all decision-makers cooperate to achieve the best outcome for the whole system, the social optimum, and (2) non-cooperative decision-making of the agents, the Nash equilibrium. Illustrating with a real-world case study of FEWS in Ventura County, California, we show the difference between the cooperative and non-cooperative decision making in terms of long-term expected cost of managing the system. We further show how the extra costs associated with utilizing the renewable sources of water and energy could be incentivised, so that the non-cooperative solution (the Nash equilibrium) would naturally converge to the best outcome for the whole system (the social optimum).

Non-cooperative stability assessments of groundwater resources management based on the tradeoff between the economy and the environment

Groundwater resource exploitations, as one of the most valuable water resources, cause conflicts among beneficiaries due to different priorities in decision-making processes. These conflicts lead beneficiaries to decide non-cooperatively. Consequently, it is essential to consider non-cooperative decision-making in order to manage groundwater resources properly. In this study, non-cooperative game theory was applied to groundwater resource management. This methodology was employed in Bad-Khaledabad study area located in the center of Iran. Also, quantity and quality simulation and optimization models were used to calculate the payoffs of beneficiaries including farmers and government. In order to understand beneficiaries’ non-cooperative decision-making, three games were examined called cropping pattern shift, efficiency improvement, and linked game. The stable solution obtained for the linked game was the scenario where farmers choose to change their cropping patterns which will increase the farmers’ profit by up to US$3,280,000, and government limits groundwater withdrawals to 66.5 MCM and pays for efficiency improvements which will raise the groundwater table 2m at the end of the fifth year.

Behavioral coordination mechanism of inter-organizational knowledge innovation in real estate projects

According to the behavioral coordination and decision-making issues occurring in the process of inter-organizational knowledge innovation in real estate projects, we employed differential game method, chose the knowledge innovation behavior between owners and contractors for the study and made a comparative analysis on the result. The research result showed that: under the model of behavioral coordination and cooperation, the performance of knowledge innovation behavior of owners and contractors, relative gains and the increment of the overall project value of the supply chain of real estate projects were more favorable than the corresponding numbers under the model of non-cooperative decision-making. Then we analyzed the value range of distribution coefficient which enabled the relative gains of owners and contractors to achieve Pareto optimality and the project value increment of knowledge innovation behavior.

Multi-Regional Transmission Planning as a Non-Cooperative Decision-Making

This paper discusses the transmission planning problem in a transmission network with multiple transmission planners. Each transmission planner is responsible for a region of the transmission network and maximizes its own region social welfare taking into account the transmission planning decisions of other transmission planners. The mathematical formulation of non-cooperative transmission planning problem is proposed. This problem is modeled using the multiple-leaders single-follower game in applied mathematics. The solution concept of the worst-Nash equilibrium is introduced to solve the set-up game. Different mathematical techniques are employed to formulate the worst-Nash equilibrium solution as a mixed-integer linear programming problem. A discussion on two possible applications of the derived mathematical structure is provided. The computational complexity is also discussed. The Three-Region IEEE-RTS96 example system is employed and modified to suit the purpose of analysis. The cooperative solution where the transmission planners merge into one single transmission planner is assumed as the benchmark in this study. The cooperative transmission planning is formulated in Appendix A of the paper. The results demonstrate the utility of the proposed solution in multi-regional transmission planning.

Discrete Choice with Social Interactions

This paper provides an analysis of aggregate behavioural outcomes when individual utility exhibits social interaction effects. We study generalized logistic models of individual choice which incorporate terms reflecting the desire of individuals to conform to the behaviour of others in an environment of noncooperative decisionmaking. Laws of large numbers are generated in such environments. Multiplicity of equilibria in these models, which are equivalent to the existence of multiple self-consistent means for average choice behaviour, will exist when the social interactions exceed a particular threshold. Local stability of these multiple equilibria is also studied. The properties of the noncooperative economy are contrasted with the properties of an economy in which a social planner determines the set of individual choices. Finally, a likelihood function based on the theoretical model is given and conditions for the econometric identifiability of the model are established.