Title: A pricing-based evolutionary cooperative game for sustainable development: a case study on land purchasing

Authors: Huizhang Shen, Ruipu Yao, Jidi Zhao, Robin G. Qiu, Zhangjie Ma

Addresses: Aetna School of Management, Shanghai Jiao Tong University, Shanghai 200052, China. ' School of Information Engineering, Tianjin University of Commerce, Tianjin 300134, China. ' Aetna School of Management, Shanghai Jiao Tong University, Shanghai 200052, China. ' Division of Engineering and Information Science, The Pennsylvania State University, PA 19355, USA. ' Aetna School of Management, Shanghai Jiao Tong University, Shanghai 200052, China

Abstract: Evolutionary Game Theory (EGT) originated from the understanding that frequency dependent fitness introduces a strategic aspect of evolution. In this paper, we apply EGT and dynamics to a sustainable development problem in economic mutualism condition and develop respective evolutionary cooperative games. In particular, we study a land purchase bargaining case in China. Using a fairness line-based dealing model, the bargaining process between the mutualistic players is analysed. Furthermore, by introducing evolutionary cooperative game model, we study the dynamical properties of the game for sustainable development and achieve stable solutions instead of periodical oscillations in traditional EGT such as prey-predator model. Evolutionary stable strategy leads to reciprocal outcomes, i.e. the win-win Nash equilibrium. Simulation results show that evolutionary stable strategies for evolutionary cooperative games depend upon certain specific values of the parameters that construct the strategy space in the evolutionary cooperative games.

Keywords: evolutionary game theory; cooperation; cooperative games; sustainable development; prices; pricing; sustainability; Nash equilibrium; fixed points; land purchase; frequency dependent fitness; evolution; economic mutualism; China; fairness; line-based dealing; bargaining; dynamical properties; stable solutions; periodical oscillations; prey-predator models; stable strategies; reciprocal outcomes; win-win outcomes; simulation; specific values; parameters; strategy space; services operations; informatics.

DOI: 10.1504/IJSOI.2010.034038

International Journal of Services Operations and Informatics, 2010 Vol.5 No.3, pp.252 - 272

Published online: 06 Jul 2010 *

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