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A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain

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  • Lingling Wang

    (School of Economics and Management, Kochi University of Technology, 2-22 Eikokuji-cho, Kochi City, Kochi 780-8515, Japan)

  • Tsunemi Watanabe

    (School of Economics and Management, Kochi University of Technology, 2-22 Eikokuji-cho, Kochi City, Kochi 780-8515, Japan
    Graduate School of Engineering, Kochi University of Technology, Miyanokuchi 185, Tosayamada-cho, Kami City, Kochi 782-0003, Japan)

Abstract

The rapid expansion of the biomass power generation industry has resulted in the conversion of substantial agricultural waste (crop straw) into energy feedstock, thereby increasing the income of farmers and promoting the development of rural areas. However, the promising industry faces financial deficits because of difficulties in collecting straw from farmers. To determine strategies for overcoming the biomass supply problem, we apply Stackelberg game theory in modeling the Chinese biomass supply chain and design incentive scenarios under stakeholder risk perception. We illustrate the proposed methodology through an empirical case study on China and demonstrate the effects of incentives on farmers and middlemen. Results show that with incentives, straw quantity and stakeholder profit are expected to increase. Incentives exert a particularly remarkable effect on farmers, with such inducements producing the highest social welfare. Moreover, perceived risk dramatically affects stakeholder profit. Mitigating the risk perception of farmers is expected to significantly advance the development of the biomass power generation industry, increase stakeholder profit, and decrease the amount of incentives needed.

Suggested Citation

  • Lingling Wang & Tsunemi Watanabe, 2016. "A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain," Energies, MDPI, vol. 9(6), pages 1-20, June.
    • Handle: RePEc:gam:jeners:v:9:y:2016:i:6:p:455-:d:71952
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    Cited by:

    1. Reeko Watanabe & Tsunemi Watanabe, 2020. "The Development of Straw-Based Biomass Power Generation in Rural Area in Northeast China—An Institutional Analysis Grounded in a Risk Management Perspective," Sustainability, MDPI, vol. 12(5), pages 1, March.
    2. A-Ru-Han Bao & Yao Liu & Jun Dong & Zheng-Peng Chen & Zhen-Jie Chen & Chen Wu, 2022. "Evolutionary Game Analysis of Co-Opetition Strategy in Energy Big Data Ecosystem under Government Intervention," Energies, MDPI, vol. 15(6), pages 1-24, March.
    3. Wang, Zhanwu & Wang, Zhenfeng & Tahir, Nadeem & Wang, Heng & Li, Jin & Xu, Guangyin, 2020. "Study of synergetic development in straw power supply chain: Straw price and government subsidy as incentive," Energy Policy, Elsevier, vol. 146(C).
    4. Xiang Zhao & Xiaoya Ma & Kun Wang & Yuqing Long & Dongjie Zhang & Zhanchun Xiao, 2017. "A Spatially Explicit Optimization Model for Agricultural Straw-Based Power Plant Site Selection: A Case Study in Hubei Province, China," Sustainability, MDPI, vol. 9(5), pages 1-19, May.
    5. Shohre Khoddami & Fereshteh Mafakheri & Yong Zeng, 2021. "A System Dynamics Approach to Comparative Analysis of Biomass Supply Chain Coordination Strategies," Energies, MDPI, vol. 14(10), pages 1-35, May.
    6. Juanjuan Wu & Jian Zhang & Weiming Yi & Hongzhen Cai & Yang Li & Zhanpeng Su, 2021. "A Game-Theoretic Analysis of Incentive Effects for Agribiomass Power Generation Supply Chain in China," Energies, MDPI, vol. 14(3), pages 1-18, January.
    7. Kaiyan Luo & Xingping Zhang & Qinliang Tan, 2018. "A Co-Opetition Straw Supply Strategy Integrating Rural Official Organizations and Farmers’ Behavior in China," Energies, MDPI, vol. 11(10), pages 1-17, October.
    8. Guo, Miao & van Dam, Koen H. & Touhami, Noura Ouazzani & Nguyen, Remy & Delval, Florent & Jamieson, Craig & Shah, Nilay, 2020. "Multi-level system modelling of the resource-food-bioenergy nexus in the global south," Energy, Elsevier, vol. 197(C).

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