Stakeholders′ ecological-economic compensation of river basin: A multi-stage dynamic game analysis

Meng Li, Shibao Lu and Wei Li

Resources Policy, 2022, vol. 79, issue C

Abstract: The growth of natural resources is an important consequence of green recovery and sustainable development measures. Protecting the ecological resources of the basin and implementing the ecological compensation system are important means to promote the sustainable development of the basin. This paper adopts the methods of static evolutionary game and dynamic evolutionary game to analyze the relevant decision-making behaviors among stakeholders of ecological compensation and the stability of dynamic evolutionary game between upstream and downstream governments and the entire game system. The results show that in the ecological compensation of the watershed, the optimal strategy of social expectations cannot be achieved only by the independent choice between the upstream and downstream governments (that is, the upstream government uses the "protection" strategy, and the downstream government uses the "compensation" strategy). Instead, through the intervention of the central government, a corresponding incentive and restraint mechanism should be established to regulate the behavior of upstream and downstream governments, so that the upstream government can choose the "protection" strategy, and the downstream government can choose the "compensation" strategy. Therefore, the ecological compensation of the river basin can maximize its benefits only if the upstream and downstream governments participate together. To adopt a socially optimal river basin ecological compensation strategy, the central government must intervene, adopt reward and punishment measures, and regulate the behavior of upstream and downstream governments. It is suggested that green strategies are urgently required to offset misuse of natural resources and urge stakeholders to play prominent role in addressing the problem.

Keywords: Watershed ecological compensation; Static evolutionary game; Dynamic evolutionary game; Upstream and downstream governments; Compensation strategy (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:79:y:2022:i:c:s0301420722005268

DOI: 10.1016/j.resourpol.2022.103083

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