Negotiating Multifunctional Forest Management in a Bioeconomic Supply Chain

This research explores the negotiation over multifunctionality in forest management, examining strategic interactions between foresters and first-transformation agents within the forest-based supply chain. Central to the study is a novel Nash-type bargaining model that provides a structured framework for these negotiations, focusing on both economic viability and ecological sustainability. The model incorporates a variational inequality approach within a multicriteria decision-making framework. Insights are validated through numerical simulations using a neural network-based deep learning algorithm. The simulations reveal that an equitable distribution of bargaining power among stakeholders promotes the coexistence of conventional and multifunctional forestry, leading to an economic decoupling between sustainable timber and wood production and its environmental impacts on biodiversity. Additionally, the findings indicate that the success of multifunctional forestry heavily relies on state aid, provided through Payments for Environmental Services, underscoring that environmental awareness alone is insufficient to significantly reduce biodiversity loss within the forest-based supply chain.