IDEAS home Printed from https://ideas.repec.org/a/wly/jnddns/v2016y2016i1n7694048.html

The Dynamic Evolution of Firms’ Pollution Control Strategy under Graded Reward‐Penalty Mechanism

Author

Listed:
  • Li Ming Chen
  • Wen Ping Wang

Abstract

The externality of pollution problem makes firms lack enough incentive to reduce pollution emission. Therefore, it is necessary to design a reasonable environmental regulation mechanism so as to effectively urge firms to control pollution. In order to inspire firms to control pollution, we divide firms into different grades according to their pollution level and construct an evolutionary game model to analyze the interaction between government’s regulation and firms’ pollution control under graded reward‐penalty mechanism. Then, we discuss stability of firms’ pollution control strategy and derive the condition of inspiring firms to control pollution. Our findings indicate that firms tend to control pollution after long‐term repeated games if government’s excitation level and monitoring frequency meet some conditions. Otherwise, firms tend to discharge pollution that exceeds the stipulated standards. As a result, in order to effectively control pollution, a government should adjust its excitation level and monitoring frequency reasonably.

Suggested Citation

  • Li Ming Chen & Wen Ping Wang, 2016. "The Dynamic Evolution of Firms’ Pollution Control Strategy under Graded Reward‐Penalty Mechanism," Discrete Dynamics in Nature and Society, John Wiley & Sons, vol. 2016(1).
    • Handle: RePEc:wly:jnddns:v:2016:y:2016:i:1:n:7694048
    DOI: 10.1155/2016/7694048
    as

    Download full text from publisher

    File URL: https://doi.org/10.1155/2016/7694048
    Download Restriction: no
    File URL: https://libkey.io/10.1155/2016/7694048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cai, Y.P. & Huang, G.H. & Tan, Q. & Yang, Z.F., 2009. "Planning of community-scale renewable energy management systems in a mixed stochastic and fuzzy environment," Renewable Energy, Elsevier, vol. 34(7), pages 1833-1847.
    2. Gryglewicz, Sebastian & Huisman, Kuno J.M. & Kort, Peter M., 2008. "Finite project life and uncertainty effects on investment," Journal of Economic Dynamics and Control, Elsevier, vol. 32(7), pages 2191-2213, July.
    3. Cai, Y.P. & Huang, G.H. & Yang, Z.F. & Tan, Q., 2009. "Identification of optimal strategies for energy management systems planning under multiple uncertainties," Applied Energy, Elsevier, vol. 86(4), pages 480-495, April.
    4. Foulon, Jerome & Lanoie, Paul & Laplante, Benoit, 2002. "Incentives for Pollution Control: Regulation or Information?," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 169-187, July.
    5. Ellingsen, Tore & Östling, Robert, 2011. "Strategic risk and coordination failure in blame games," Economics Letters, Elsevier, vol. 110(2), pages 90-92, February.
    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. Yong Zeng & Yanpeng Cai & Guohe Huang & Jing Dai, 2011. "A Review on Optimization Modeling of Energy Systems Planning and GHG Emission Mitigation under Uncertainty," Energies, MDPI, vol. 4(10), pages 1-33, October.
    2. Dong, C. & Huang, G.H. & Cai, Y.P. & Liu, Y., 2012. "An inexact optimization modeling approach for supporting energy systems planning and air pollution mitigation in Beijing city," Energy, Elsevier, vol. 37(1), pages 673-688.
    3. Ye Liu & Guohe Huang & Yanpeng Cai & Cong Dong, 2011. "An Inexact Mix-Integer Two-Stage Linear Programming Model for Supporting the Management of a Low-Carbon Energy System in China," Energies, MDPI, vol. 4(10), pages 1-30, October.
    4. Suganthi, L. & Iniyan, S. & Samuel, Anand A., 2015. "Applications of fuzzy logic in renewable energy systems – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 585-607.
    5. Li, Y.F. & Li, Y.P. & Huang, G.H. & Chen, X., 2010. "Energy and environmental systems planning under uncertainty--An inexact fuzzy-stochastic programming approach," Applied Energy, Elsevier, vol. 87(10), pages 3189-3211, October.
    6. Liu, Y. & Huang, G.H. & Cai, Y.P. & Cheng, G.H. & Niu, Y.T. & An, K., 2009. "Development of an inexact optimization model for coupled coal and power management in North China," Energy Policy, Elsevier, vol. 37(11), pages 4345-4363, November.
    7. Dong, C. & Huang, G.H. & Cai, Y.P. & Xu, Y., 2011. "An interval-parameter minimax regret programming approach for power management systems planning under uncertainty," Applied Energy, Elsevier, vol. 88(8), pages 2835-2845, August.
    8. Chen, C. & Li, Y.P. & Huang, G.H. & Zhu, Y., 2012. "An inexact robust nonlinear optimization method for energy systems planning under uncertainty," Renewable Energy, Elsevier, vol. 47(C), pages 55-66.
    9. Tan, Q. & Huang, G.H. & Cai, Y.P., 2011. "Radial interval chance-constrained programming for agricultural non-point source water pollution control under uncertainty," Agricultural Water Management, Elsevier, vol. 98(10), pages 1595-1606, August.
    10. Yang, Gaiqiang & Li, Xia & Huo, Lijuan & Liu, Qi, 2020. "A solving approach for fuzzy multi-objective linear fractional programming and application to an agricultural planting structure optimization problem," Chaos, Solitons & Fractals, Elsevier, vol. 141(C).
    11. Inés Macho-Stadler, 2008. "Environmental regulation: choice of instruments under imperfect compliance," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(1), pages 1-21, March.
    12. Zhengxia He & Shichun Xu & Wenxing Shen & Meiling Wang & Cunfang Li, 2019. "Exploring external and internal pressures on the environmental behavior of paper enterprises in China: A qualitative study," Business Strategy and the Environment, Wiley Blackwell, vol. 28(6), pages 951-969, September.
    13. Balter, Anne G. & Huisman, Kuno J.M. & Kort, Peter M., 2022. "Effects of creative destruction on the size and timing of an investment," International Journal of Production Economics, Elsevier, vol. 252(C).
    14. Gottschamer, L. & Zhang, Q., 2016. "Interactions of factors impacting implementation and sustainability of renewable energy sourced electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 164-174.
    15. Changyu Zhou & Guohe Huang & Jiapei Chen, 2019. "A Type-2 Fuzzy Chance-Constrained Fractional Integrated Modeling Method for Energy System Management of Uncertainties and Risks," Energies, MDPI, vol. 12(13), pages 1-21, June.
    16. Dasgupta, Susmita & Hong, Jong Ho & Laplante, Benoit & Mamingi, Nlandu, 2006. "Disclosure of environmental violations and stock market in the Republic of Korea," Ecological Economics, Elsevier, vol. 58(4), pages 759-777, July.
    17. Macho-Stadler, Ines & Perez-Castrillo, David, 2006. "Optimal enforcement policy and firms' emissions and compliance with environmental taxes," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 110-131, January.
    18. Li, Yanfu & Zio, Enrico, 2012. "Uncertainty analysis of the adequacy assessment model of a distributed generation system," Renewable Energy, Elsevier, vol. 41(C), pages 235-244.
    19. Wunhong Su & Chun Guo & Xiaobao Song, 2022. "Media coverage, Environment Protection Law and environmental research and development: evidence from the Chinese-listed firms," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(5), pages 6953-6983, May.
    20. Djembissi, Bertrand, 2011. "Excessive risk taking and the maturity structure of debt," Journal of Economic Dynamics and Control, Elsevier, vol. 35(10), pages 1800-1816, October.

    More about this item

    Statistics

    Access and download statistics

    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:wly:jnddns:v:2016:y:2016:i:1:n:7694048. 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: Wiley Content Delivery (email available below). General contact details of provider: https://onlinelibrary.wiley.com/journal/3059 .

    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.