A Novel Model for the Analysis of Interactions Between Governments and Agricultures in a Study of Social Beneficial Externalities Based on the Stackelberg Game: A Case Study on Cotton Production

Abstract

Production is a key economic activity with potential long-term social benefits that can be thoroughly realised only if governments comply with their duties towards domestic production. Governments are responsible for the production of sustainable agricultural products via appropriate allocation of subsidies and regulation of price policies that would help take advantage of the potentials underlying agricultural production. In this paper, a model is developed to investigate the interaction between two decision makers in the stackelberg game, government as leader and agriculture as follower, with the ultimate aim of providing benefits to all sectors in the society in the sustainable agriculture paradigm. The proposed model is validated and its efficiency demonstrated via a case study of cotton production as a strategic agricultural production. The model is first solved using a combination of fuzzy mathematical and grey quadratic programming methods to account for the inherent uncertainty in a number of problem parameters. The model is then analyzed against various government-producer interaction scenarios and finally, the analysis results are compared.