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Implementation Of A Multi-Agent Environmental Regulation Strategy Under Chinese Fiscal Decentralization: An Evolutionary Game Theoretical Approach, Ke Jiang, Daming You, Ryan Knowles Merrill, Zhendong Li

Research Collection Lee Kong Chian School Of Business

Evolutionary game theory (EGT) provides a powerful tool with which to unpack the interactive strategies of polluting enterprises (PEs), local government regulators (LG), and central government planners (CG) in China. Here, the prevailing institutional system of fiscal decentralization sees regulatory mandates set by the CG and enforced at the LG level. This delegation shapes managers' incentives when deciding the degree to which firms will incur costs to reduce pollution and comply with state directives. Manager's choice sets draw shape from decisions at the LG level, where regulators balance the pursuit of environmental quality with the economic payoffs of tacit collusion …