A system dynamics model integrated evolutionary game theory and hybrid appraisal mechanisms for industrial pollution control

Fulei Shi; Zisha Zhou; Jianzhang Wang; Chuansheng Wang; Feng Gu; Fulei Shi; Zisha Zhou; Jianzhang Wang; Chuansheng Wang; Feng Gu

doi:10.3934/era.2026324

Electronic Research Archive

2026, Volume 34, Issue 10: 7500-7530. doi: 10.3934/era.2026324

Previous Article Next Article

Research article Special Issues

A system dynamics model integrated evolutionary game theory and hybrid appraisal mechanisms for industrial pollution control

1.
School of Management and Engineering, Capital University of Economics and Business, Beijing 100070, China
2.
School of Business, Nanfang College, Guangzhou 510970, China
3.
Department of Computer Science, College of Staten Island, City University of New York, Staten Island, NY 10314, USA

Received: 04 June 2026 Revised: 21 August 2026 Accepted: 24 August 2026 Published: 31 August 2026

Effectively controlling industrial pollution is a critical global challenge, yet the strategic interaction between local and central governments often leads to unstable or unpredictable policy enforcement, creating significant difficulties for long-term environmental governance. In this study, we developed an evolutionary game model within a system dynamics (SD) framework to analyze the strategic behaviors of local and central governments. We proposed and compared three mechanisms, the assessment mechanism for ecological progress (AMFEP), the ecological governance supervision and punishment mechanism (EGSPM), and a hybrid model combining both, to stabilize the evolutionary path. Simulation results demonstrated that while the basic model and individual mechanisms often failed to converge, the hybrid model successfully drove the system to a stable equilibrium, increasing the probability of local governments implementing environmental regulation strategies from 0.2 to 0.167. This finding indicated that a combined appraisal mechanism is significantly more effective in guiding local governments toward proactive environmental enforcement while central governments maintain a lighter supervisory role, offering a robust and practical policy tool for sustainable industrial pollution management.
- evolutionary game,
- industrial pollution,
- system dynamics model,
- assessment mechanisms
Citation: Fulei Shi, Zisha Zhou, Jianzhang Wang, Chuansheng Wang, Feng Gu. A system dynamics model integrated evolutionary game theory and hybrid appraisal mechanisms for industrial pollution control[J]. Electronic Research Archive, 2026, 34(10): 7500-7530. doi: 10.3934/era.2026324

Related Papers:

Abstract

Effectively controlling industrial pollution is a critical global challenge, yet the strategic interaction between local and central governments often leads to unstable or unpredictable policy enforcement, creating significant difficulties for long-term environmental governance. In this study, we developed an evolutionary game model within a system dynamics (SD) framework to analyze the strategic behaviors of local and central governments. We proposed and compared three mechanisms, the assessment mechanism for ecological progress (AMFEP), the ecological governance supervision and punishment mechanism (EGSPM), and a hybrid model combining both, to stabilize the evolutionary path. Simulation results demonstrated that while the basic model and individual mechanisms often failed to converge, the hybrid model successfully drove the system to a stable equilibrium, increasing the probability of local governments implementing environmental regulation strategies from 0.2 to 0.167. This finding indicated that a combined appraisal mechanism is significantly more effective in guiding local governments toward proactive environmental enforcement while central governments maintain a lighter supervisory role, offering a robust and practical policy tool for sustainable industrial pollution management.

References

[1]	N. Saha, M. S. Rahman, M. B. Ahmed, J. L. Zhou, H. H. Ngo, W. Guo, Industrial metal pollution in water and probabilistic assessment of human health risk, J. Environ. Manage., 185 (2017), 70–78. https://doi.org/10.1016/j.jenvman.2016.10.023 doi: 10.1016/j.jenvman.2016.10.023
[2]	P. Fernández-Navarro, J. García-Pérez, R. Ramis, E. Boldo, G. López-Abente, Industrial pollution and cancer in Spain: An important public health issue, Environ. Res., 159 (2017), 555–563. https://doi.org/10.1016/j.envres.2017.08.049 doi: 10.1016/j.envres.2017.08.049
[3]	C. He, Z. Huang, X. Ye, Spatial heterogeneity of economic development and industrial pollution in urban China, Stochastic Environ. Res. Risk Assess., 28 (2014), 767–781. https://doi.org/10.1007/s00477-013-0736-8 doi: 10.1007/s00477-013-0736-8
[4]	B. Van Rooij, C. W. H. Lo, Fragile convergence: Understanding variation in the enforcement of China's industrial pollution law, Law Policy, 32 (2010), 14–37. https://doi.org/10.1111/j.1467-9930.2009.00309.x doi: 10.1111/j.1467-9930.2009.00309.x
[5]	J. Xu, W. F. Hyde, Y. Ji, Effective pollution control policy for China, J. Prod. Anal., 33 (2010), 47–66. https://doi.org/10.1007/s11123-009-0153-7 doi: 10.1007/s11123-009-0153-7
[6]	M. Maung, C. Wilson, X. Tang, Political connections and industrial pollution: Evidence based on state ownership and environmental levies in China, J. Bus. Ethics, 138 (2016), 649–659. https://doi.org/10.1007/s10551-015-2771-5 doi: 10.1007/s10551-015-2771-5
[7]	J. Cheng, S. Dai, X. Ye, Spatiotemporal heterogeneity of industrial pollution in China, China Econ. Rev., 40 (2016), 179–191. https://doi.org/10.1016/j.chieco.2016.07.001 doi: 10.1016/j.chieco.2016.07.001
[8]	J. Lan, M. Kakinaka, X. Huang, Foreign direct investment, human capital and environmental pollution in China, Environ. Resour. Econ., 51 (2012), 255–275. https://doi.org/10.1007/s10640-011-9498-2 doi: 10.1007/s10640-011-9498-2
[9]	F. Testa, D. Styles, F. Iraldo, Case study evidence that direct regulation remains the main driver of industrial pollution avoidance and may benefit operational efficiency, J. Cleaner Prod., 21 (2012), 1–10. https://doi.org/10.1016/j.jclepro.2011.09.002 doi: 10.1016/j.jclepro.2011.09.002
[10]	D. Zheng, M. Shi, Multiple environmental policies and pollution haven hypothesis: Evidence from China's polluting industries, J. Cleaner Prod., 141 (2017), 295–304. https://doi.org/10.1016/j.jclepro.2016.09.091 doi: 10.1016/j.jclepro.2016.09.091
[11]	C. Plourde, D. Yeung, A model of industrial pollution in a stochastic environment, J. Environ. Econ. Manage., 16 (1989), 97–105. https://doi.org/10.1016/0095-0696(89)90001-6 doi: 10.1016/0095-0696(89)90001-6
[12]	F. Van Der Ploeg, A. J. De Zeeuw, International aspects of pollution control, Environ. Resour. Econ., 2 (1992), 117–139. https://doi.org/10.1007/BF00338239 doi: 10.1007/BF00338239
[13]	W. T Lin, The control of environmental pollution and optimal investment and employment decisions, Optim. Control. Appl. Methods, 8 (2010), 21–36. https://doi.org/10.1002/oca.4660080103 doi: 10.1002/oca.4660080103
[14]	B. A. Forster, Optimal consumption planning in a polluted environment, Econ. Rec., 49 (2010), 534–545. https://doi.org/10.1111/j.1475-4932.1973.tb01954.x doi: 10.1111/j.1475-4932.1973.tb01954.x
[15]	R. Lusky, A model of recycling and pollution control, Can. J. Econ., 9 (1976), 91–101. https://doi.org/10.2307/134417 doi: 10.2307/134417
[16]	T. N. Cason, L. Friesen, L. Gangadharan, Regulatory performance of audit tournaments and compliance observability, Eur. Econ. Rev., 85 (2016), 288–306. https://doi.org/10.1016/j.euroecorev.2016.03.009 doi: 10.1016/j.euroecorev.2016.03.009
[17]	S. M. Gilpatric, C. A. Vossler, M. McKee, Regulatory enforcement with competitive endogenous saudit mechanisms, Rand J. Econ., 42 (2011), 292–312. https://doi.org/10.1111/j.1756-2171.2011.00134.x doi: 10.1111/j.1756-2171.2011.00134.x
[18]	W. S. Misiolek, Pollution control through price incentives: The role of rent seeking costs in monopoly markets, J. Environ. Econ. Manage., 15 (1989), 1–8. https://doi.org/10.1016/0095-0696(88)90023-X doi: 10.1016/0095-0696(88)90023-X
[19]	D. A. Yao, Strategic responses to automobile emissions control: A game-theoretic analysis, J. Environ. Econ. Manage., 15 (1988), 419–438. https://doi.org/10.1016/0095-0696(88)90036-8 doi: 10.1016/0095-0696(88)90036-8
[20]	S. R, Miliman, R. Prince, Firm incentives to promote technological change in pollution control, J. Environ. Econ. Manage., 17 (1989), 247–265. https://doi.org/10.1016/0095-0696(89)90019-3 doi: 10.1016/0095-0696(89)90019-3
[21]	A. M. Oestreich, Firms' emissions and self-reporting under competitive audit mechanisms, Environ. Resour. Econ., 62 (2015), 949–978. https://doi.org/10.1007/s10640-014-9855-z doi: 10.1007/s10640-014-9855-z
[22]	J. M. Smith, G. R. Price, The logic of animal conflict, Nature, 246 (1973), 15–18. https://doi.org/10.1038/246015a0 doi: 10.1038/246015a0
[23]	E. Frey, Evolutionary game theory: Theoretical concepts and applications to microbial com-munities, Physica A, 389 (2010), 4265–4298. https://doi.org/10.1016/j.physa.2010.02.047 doi: 10.1016/j.physa.2010.02.047
[24]	B. R. Dijkstra, F. P. de Vries, Location choice by households and polluting firms: An evolutionary approach, Eur. Econ. Rev., 50 (2006), 425–446. https://doi.org/10.1016/j.euroecorev.2004.09.006 doi: 10.1016/j.euroecorev.2004.09.006
[25]	L. R. Lawlor, J. M. Smith, The coevolution and stability of competing species, Am. Nat., 110 (1976), 79–99. https://doi.org/10.1086/283049 doi: 10.1086/283049
[26]	W. D. Hamilton, R. M. May, Dispersal in stable habitats, Nature, 269 (1977), 578–581. https://doi.org/10.1038/269578a0 doi: 10.1038/269578a0
[27]	W. Chen, Z. H. Hu, Using evolutionary game theory to study governments and manufacturers' behavioral strategies under various carbon taxes and subsidies, J. Cleaner Prod., 201 (2018), 123–141. https://doi.org/10.1016/j.jclepro.2018.08.007 doi: 10.1016/j.jclepro.2018.08.007
[28]	S. M. Estalaki, A. Abed-Elmdoust, R. Kerachian, Developing environmental penalty functions for river water quality management: Application of evolutionary game theory, Environ. Earth Sci., 73 (2015), 4201–4213. https://doi.org/10.1007/s12665-014-3706-7 doi: 10.1007/s12665-014-3706-7
[29]	L. Shen, Y. Wang, Supervision mechanism for pollution behavior of Chinese enterprises based on haze governance, J. Cleaner Prod., 197 (2018), 571–582. https://doi.org/10.1016/j.jclepro.2018.06.160 doi: 10.1016/j.jclepro.2018.06.160
[30]	H. Wang, L. Cai, W. Zeng, Research on the evolutionary game of environmental pollution in system dynamics model, J. Exp. Theor. Artif. Intell., 23 (2011), 39–50. https://doi.org/10.1080/0952813X.2010.506300 doi: 10.1080/0952813X.2010.506300
[31]	Y. Tian, K. Govindan, Q. Zhu, A system dynamics model based on evolutionary game theory for green supply chain management diffusion among Chinese manufacturers, J. Cleaner Prod., 80 (2014), 96–105. https://doi.org/10.1016/j.jclepro.2014.05.076 doi: 10.1016/j.jclepro.2014.05.076
[32]	S. Guo, P. Zhang, J. Yang, System dynamics model based on evolutionary game theory for quality supervision among construction stakeholders, J. Civil Eng. Manage., 24 (2018), 318–330. https://doi.org/10.3846/jcem.2018.3068 doi: 10.3846/jcem.2018.3068
[33]	D. Zheng, M. Shi, Multiple environmental policies and pollution haven hypothesis: evidence from China's polluting industries, J. Cleaner Prod., 141 (2017), 295–304. https://doi.org/10.1016/j.jclepro.2016.09.091 doi: 10.1016/j.jclepro.2016.09.091
[34]	M. Chaerul, M. Tanaka, A. V. Shekdar, A system dynamics approach for hospital waste management, Waste Manage., 28 (2008), 442–449. https://doi.org/10.1016/j.wasman.2007.01.007 doi: 10.1016/j.wasman.2007.01.007
[35]	B. Dyson, N. B. Chang, Forecasting municipal solid waste generation in a fast-growing urban region with system dynamics modeling, Waste Manage., 25 (2005), 669–679. https://doi.org/10.1016/j.wasman.2004.10.005 doi: 10.1016/j.wasman.2004.10.005
[36]	D. Vlachos, P. Georgiadis, E. Iakovou, A system dynamics model for dynamic capacity planning of remanufacturing in closed-loop supply chains, Comput. Oper. Res., 34 (2007), 367–394. https://doi.org/10.1016/j.cor.2005.03.005 doi: 10.1016/j.cor.2005.03.005
[37]	I. Winz, G. Brierley, S. Trowsdale, The use of system dynamics simulation in water resources management, Water Resour. Manage., 23 (2009), 1301–1323. https://doi.org/10.1007/s11269-008-9328-7 doi: 10.1007/s11269-008-9328-7
[38]	Q. Liu, X. Li, X. Meng, Effectiveness research on the multi-player evolutionary game of coalmine safety regulation in China based on system dynamics, Saf. Sci., 111 (2019), 224–233. https://doi.org/10.1016/j.ssci.2018.07.014 doi: 10.1016/j.ssci.2018.07.014
[39]	G. Kostka, Command without control: The case of China's environmental target system, Regul. Governance, 10 (2016), 58–74. https://doi.org/10.1111/rego.12082 doi: 10.1111/rego.12082
[40]	J. Liang, L. Langbein, Performance management, high-powered incentives, and environmental policies in China, Int. Public Manage. J., 18 (2015), 346–385. https://doi.org/10.1080/10967494.2015.1043167 doi: 10.1080/10967494.2015.1043167
[41]	Y. J. Chen, P. Li, Y. Lu, Career concerns and multitasking local bureaucrats: Evidence of a target-based performance evaluation system in China, J. Dev. Econ., 133 (2018), 84–101. https://doi.org/10.1016/j.jdeveco.2018.02.001 doi: 10.1016/j.jdeveco.2018.02.001
[42]	G. He, S. Wang, B. Zhang, Watering down environmental regulation in China, Q. J. Econ., 135 (2020), 2135–185. https://doi.org/10.1093/qje/qjaa024 doi: 10.1093/qje/qjaa024
[43]	D. Friedman, On economic applications of evolutionary game theory, J. Evol. Econ., 8 (1998), 15–43. https://doi.org/10.1007/s001910050054 doi: 10.1007/s001910050054
[44]	F. Shi, C. Wang, C. Yao, A new evolutionary game analysis for industrial pollution management considering the central government's punishment, Dyn. Games Appl., 12 (2022), 677–688. https://doi.org/10.1007/s13235-021-00407-x. doi: 10.1007/s13235-021-00407-x
[45]	C. Wang, F. Shi, An evolutionary game model for industrial pollution management under two punishment mechanisms, Int. J. Environ. Res. Public Health, 16 (2019), 2775. https://doi.org/10.3390/ijerph16152775 doi: 10.3390/ijerph16152775
[46]	M. L. Cropper, W. E. Oates, Environmental economics: a survey, J. Econ. Lit., 30 (1992), 675–740. http://www.jstor.org/stable/2727701
[47]	W. A. Brock, M. S. Taylor, The green Solow model, J. Econ. Growth, 15 (2010), 127–153. https://doi.org/10.1007/s10887-010-9051-0 doi: 10.1007/s10887-010-9051-0
[48]	R. Färe, S. Grosskopf, C. A. Pasurka Jr, Environmental production functions and environmental directional distance functions, Energy, 32 (2007), 1055–1066. https://doi.org/10.1016/j.energy.2006.09.005 doi: 10.1016/j.energy.2006.09.005
[49]	M. Scheffer, S. Carpenter, J. A. Foley, C. Folke, B. Walker, Catastrophic shifts in ecosystems, Nature, 413 (2001), 591–596. https://doi.org/10.1038/35098000 doi: 10.1038/35098000
[50]	G. S. Becker, Crime and punishment: An economic approach, J. Polit. Econ., 76 (1968), 169–217. https://doi.org/10.1086/259394 doi: 10.1086/259394

Reader Comments

Your name:*

Email:*
© 2026 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)