Optimal Interventions in Coupled-Activity Network Games: Application to Sustainable Forestry
Rohit Parasnis, Saurabh Amin

TL;DR
This paper develops a network game model to design optimal pricing policies that incentivize sustainable forestry practices, balancing economic welfare and environmental constraints, with solutions applicable to real-world policy-making.
Contribution
It introduces a novel framework combining network game theory and sustainability incentives, providing closed-form solutions and a new centrality measure for policy targeting.
Findings
Optimal pricing strategies can improve welfare and reduce unsustainable practices simultaneously.
Closed-form solutions are derived for realistic scenarios with uniform pricing and penalties.
A new node centrality measure identifies key agents influencing sustainability outcomes.
Abstract
We address the challenge of promoting sustainable practices in production forests managed by strategic entities (agents) that harvest agricultural commodities under concession agreements. These entities engage in activities that either follow sustainable production practices or expand into protected forests for agricultural growth, which leads to unsustainable production. Our study uses a network game model to design optimal pricing policies that incentivize sustainability and discourage environmentally harmful practices. Specifically, we model interactions between agents, capturing both intra-activity (within a single production activity) and cross-activity (between sustainable and unsustainable practices) influences on agent behavior. We solve the problem of maximizing welfare while adhering to budgetary and environmental constraints - particularly, limiting the aggregate level of…
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Taxonomy
TopicsForest Management and Policy · Game Theory and Voting Systems · Game Theory and Applications
