Negative Axiomatic Boxed Pigs Game Theory And Its Application In Controlling Environmental Pollution Problems

The economy scale has seen a significantly increase since the industrial revolution, however, the lurch of highly intensive energy and natural resource consumption based growth path and the increasing deteriorated environmental problems facing each economy of the world. The frequently exposed environmental problems by the media have motivated the formation of the nonprofit environmental protection organization as well as invoking the awareness of against polluting behaviors among the ordinary folks. Therefore, the concept that environmental management has gradually been developed and studied and various counterstrategies regarding the environmental pollution, effective or not, have been proposed. People begin to realize with the development of environmental management that the environmental pollution could be well controlled only by recognizing the fact that environmental problems are closely connected with the economic issues. The pollution is largely discharged from energy-intensive entrepreneurs, which is inevitable for most industrious countries, while the slackness in administer monitoring might want to take the primary responsibility. According to this observation, the key to environmental pollution could be converted to drafting proper strategies to effectively monitor the high pollution emission firms. According to existing literatures, many regulatory strategies are enacted through abstract theory instead of a theory supported with ground facts. Therefore, in this paper, we propose a novel model- Negative Axiomatic Boxed Pigs Game Theory(NABPGT) to study its potential application in environment pollution regulation. The results derivatived from model are found to be useful in help making regulatory strategies and providing policymaker an effective decision-making framework.The structure of this paper is organized as the following: Firstly, the prerequisites about game theory as well as the newly developed Axiomatic Boxed Pigs theory are introduced in the first part of the paper, besides, the “negative public welfare” phenomenon, which is the realistic prototype that best matches our model, is also introduced in the first part. For the following chapter, the “simple negative axiomatic boxed pig game system” is established by lending the methodology from “axiomatic boxed pigs game” and the idea of “negative boxed pigs”, which are initially proposed by Dianyu Jiang. Next step, by reviewing the literatures regarding the pollution discharging regulation, a theoretical game model of pollution discharged firms’ production decision-making with respect to dual-state: government regulating and anarchy-regulating is established, respectively. From the angle of the game model, government intervention is considered as a necessity in enacting corresponding policies and controlling the pollution. Lastly, the social welfare function defined in this part is discussed, and we are interested in seeking a steady situation among different optimal social welfare statues. After this, we study the various schemes that can transfer a given steady situation to the equilibrium of interest through adjusting the parameters of the model. We apply the conclusions of this theoretical work to the production decision game model and propose a series of new policies.