IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i15p11977-d1210229.html
   My bibliography  Save this article

Co-Evolutionary Mechanism of Stakeholders’ Strategies in Comprehensive Agricultural Water Price Reform: The View of Evolutionary Game Based on Prospect Theory

Author

Listed:
  • Feng Li

    (Department of Construction Engineering and Management, North China University of Water Resources and Electric Power, Zhengzhou 450046, China)

  • Xuewan Du

    (Department of Construction Engineering and Management, North China University of Water Resources and Electric Power, Zhengzhou 450046, China)

  • Pengchao Zhang

    (Department of Construction Engineering and Management, North China University of Water Resources and Electric Power, Zhengzhou 450046, China)

  • Huimin Li

    (Department of Construction Engineering and Management, North China University of Water Resources and Electric Power, Zhengzhou 450046, China)

  • Xiaoxia Fei

    (Henan Water Conservancy Survey Design and Research Co., Ltd., Zhengzhou 450046, China)

Abstract

In today’s world, the contradiction between water supply and demand is becoming increasingly pronounced, with a particular emphasis on the severe shortage of water for agricultural purposes. As a result, it has become imperative to promote the comprehensive reform of agricultural water pricing and increase water conservation awareness among water users. However, during the actual promotion process, the conflicting interests among stakeholders often create a behavioral game that seriously hinders the effective implementation of the agricultural water price reform. Therefore, it is crucial to address this conflict of interest and find ways to overcome it in order to ensure the successful implementation of the agricultural water pricing reform. In order to explore the dynamic evolution process of the behavior and decision making of the stakeholders in the comprehensive agricultural water price reform and the influencing factors and to propose relevant strategies to effectively promote the reform. This article constructs a three-party game model based on MA-PT theory with the government, farmers, and water supply units as the main subjects, solves the equation with the perceived benefit matrix instead of the traditional benefit matrix, and calculates the objective conditions for reaching the steady state. The simulation results show that the behavioral decision of the game subject to participate in the reform will be influenced by their perception of gains and losses, and there is a mutual influence between the three strategic choices. Therefore, the reform of agricultural water prices should consider the affordability of farmers and water supply units. The government appropriately adopts a reward system to encourage farmers and water supply units to actively participate in the reform to play a positive role and appropriate penalties for promoting the reform, the early realization of the reform goals, and the development of water-saving agriculture.

Suggested Citation

  • Feng Li & Xuewan Du & Pengchao Zhang & Huimin Li & Xiaoxia Fei, 2023. "Co-Evolutionary Mechanism of Stakeholders’ Strategies in Comprehensive Agricultural Water Price Reform: The View of Evolutionary Game Based on Prospect Theory," Sustainability, MDPI, vol. 15(15), pages 1-31, August.
  • Handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:11977-:d:1210229
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/15/11977/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/15/15/11977/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Momeni, Marzieh & Zakeri, Zahra & Esfandiari, Mojtaba & Behzadian, Kourosh & Zahedi, Sina & Razavi, Vahid, 2019. "Comparative analysis of agricultural water pricing between Azarbaijan Provinces in Iran and the state of California in the US: A hydro-economic approach," Agricultural Water Management, Elsevier, vol. 223(C), pages 1-1.
    2. Bryan Leonard & Christopher Costello & Gary D Libecap, 2019. "Expanding Water Markets in the Western United States: Barriers and Lessons from Other Natural Resource Markets," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(1), pages 43-61.
    3. Ritzberger, Klaus & Weibull, Jorgen W, 1995. "Evolutionary Selection in Normal-Form Games," Econometrica, Econometric Society, vol. 63(6), pages 1371-1399, November.
    4. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    5. Berbel, J. & Gomez-Limon, J. A., 2000. "The impact of water-pricing policy in Spain: an analysis of three irrigated areas," Agricultural Water Management, Elsevier, vol. 43(2), pages 219-238, March.
    6. Wei Qu & Jing Yan & Yanmei Tan & Qin Tu, 2021. "Analysis on the Influencing Factors of Farmers’ Cognition on the Function of Agricultural Water Price—Taking Hexi Corridor as an Example," Sustainability, MDPI, vol. 13(9), pages 1-14, May.
    7. Yu Liu & Dong Cai & Chunxiang Guo & Haizhen Huang, 2020. "Evolutionary Game of Government Subsidy Strategy for Prefabricated Buildings Based on Prospect Theory," Mathematical Problems in Engineering, Hindawi, vol. 2020, pages 1-10, November.
    8. Zhang, Minhui & Zhang, Qin & Zhou, Dequn & Wang, Lei, 2021. "Punishment or reward? Strategies of stakeholders in the quality of photovoltaic plants based on evolutionary game analysis in China," Energy, Elsevier, vol. 220(C).
    9. Cuimei Lv & Huiqin Li & Minhua Ling & Xi Guo & Zening Wu & Changkuan Gu & Yang Li, 2021. "An Innovative Emergy Quantification Method for Eco-economic Compensation for Agricultural Water Rights Trading," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(3), pages 775-792, February.
    10. Danyang Di & Zening Wu & Huiliang Wang & Cuimei Lv, 2020. "A Double-Layer Dynamic Differential Game Model for the Optimal Trading Quantity of Water and Price Setting in Water Rights Transactions," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(1), pages 245-262, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuling Wang & Chunfu Wang & Xiaopeng Deng & Zezhou Wu, 2023. "Evolutionary Game Analysis of the Utilization of Construction Waste Resources Based on Prospect Theory," Sustainability, MDPI, vol. 15(3), pages 1-12, January.
    2. Jonathan Newton, 2018. "Evolutionary Game Theory: A Renaissance," Games, MDPI, vol. 9(2), pages 1-67, May.
    3. Aldaya, Maite M. & Gutiérrez-Martín, Carlos & Espinosa-Tasón, Jaime & Ederra, Idoia & Sánchez, Mercedes, 2023. "The impact of the territorial gradient and the irrigation water price on agricultural production along the first phase of the Navarra Canal in Spain," Agricultural Water Management, Elsevier, vol. 281(C).
    4. Sheng, Jichuan & Yang, Hongqiang, 2024. "Linking water markets with payments for watershed services: the eastern route of China's South-North Water Transfer Project," Agricultural Water Management, Elsevier, vol. 295(C).
    5. Massimiliano Landi & Pier Luigi Sacco, 2001. "Norms of Cooperation in a Game of Partnership," Computational and Mathematical Organization Theory, Springer, vol. 7(3), pages 233-266, October.
    6. Wei Qu & Jing Yan & Yanmei Tan & Qin Tu, 2021. "Analysis on the Influencing Factors of Farmers’ Cognition on the Function of Agricultural Water Price—Taking Hexi Corridor as an Example," Sustainability, MDPI, vol. 13(9), pages 1-14, May.
    7. Cuimei Lv & Huiqin Li & Minhua Ling & Xi Guo & Zening Wu & Changkuan Gu & Yang Li, 2021. "An Innovative Emergy Quantification Method for Eco-economic Compensation for Agricultural Water Rights Trading," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 35(3), pages 775-792, February.
    8. Dong, Jun & Jiang, Yuzheng & Liu, Dongran & Dou, Xihao & Liu, Yao & Peng, Shicheng, 2022. "Promoting dynamic pricing implementation considering policy incentives and electricity retailers’ behaviors: An evolutionary game model based on prospect theory," Energy Policy, Elsevier, vol. 167(C).
    9. Seow Eng Ong & Davin Wang & Calvin Chua, 2023. "Disruptive Innovation and Real Estate Agency: The Disruptee Strikes Back," The Journal of Real Estate Finance and Economics, Springer, vol. 67(2), pages 287-317, August.
    10. Herrmann, Tabea & Hübler, Olaf & Menkhoff, Lukas & Schmidt, Ulrich, 2016. "Allais for the poor," Kiel Working Papers 2036, Kiel Institute for the World Economy (IfW Kiel).
    11. Christiane Goodfellow & Dirk Schiereck & Steffen Wippler, 2013. "Are behavioural finance equity funds a superior investment? A note on fund performance and market efficiency," Journal of Asset Management, Palgrave Macmillan, vol. 14(2), pages 111-119, April.
    12. Berg, Joyce E. & Rietz, Thomas A., 2019. "Longshots, overconfidence and efficiency on the Iowa Electronic Market," International Journal of Forecasting, Elsevier, vol. 35(1), pages 271-287.
    13. Reckers, Philip M.J. & Sanders, Debra L. & Roark, Stephen J., 1994. "The Influence of Ethical Attitudes on Taxpayer Compliance," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(4), pages 825-836, December.
    14. Bier, Vicki & Gutfraind, Alexander, 2019. "Risk analysis beyond vulnerability and resilience – characterizing the defensibility of critical systems," European Journal of Operational Research, Elsevier, vol. 276(2), pages 626-636.
    15. Sitinjak Elizabeth Lucky Maretha & Haryanti Kristiana & Kurniasari Widuri & Sasmito Yohanes Wisnu Djati, 2019. "Investor behavior based on personality and company life cycle," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 10(2), pages 23-38, August.
    16. Theo Arentze & Tao Feng & Harry Timmermans & Jops Robroeks, 2012. "Context-dependent influence of road attributes and pricing policies on route choice behavior of truck drivers: results of a conjoint choice experiment," Transportation, Springer, vol. 39(6), pages 1173-1188, November.
    17. van den Bergh, J.C.J.M. & Botzen, W.J.W., 2015. "Monetary valuation of the social cost of CO2 emissions: A critical survey," Ecological Economics, Elsevier, vol. 114(C), pages 33-46.
    18. Frank D. Hodge & Roger D. Martin & Jamie H. Pratt, 2006. "Audit Qualifications of Income†Decreasing Accounting Choices," Contemporary Accounting Research, John Wiley & Sons, vol. 23(2), pages 369-394, June.
    19. Philippe Fevrier & Sebastien Gay, 2005. "Informed Consent Versus Presumed Consent The Role of the Family in Organ Donations," HEW 0509007, University Library of Munich, Germany.
    20. Ran Sun Lyng & Jie Zhou, 2019. "Household Portfolio Choice Before and After a House Purchase," Economics Working Papers 2019-01, Department of Economics and Business Economics, Aarhus University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:15:p:11977-:d:1210229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.