Differentiated oligopoly considering dynamic water rights allocation
This paper examines a dynamic oligopoly response model with differentiated goods and sticky prices.Based on the dual decision problem of production planning and water conservation,this paper propose a water resource optimisation model and provide optimal decisions on production planning,water conservation,and water procurement under static Nash equilibrium,open-loop Nash equilibrium,closed-loop Nash equilibrium,and feedback equilibrium.Finally,this paper examines the effects of oligopoly competition on social welfare,analysing the optimal solution by means of numerical simulation as parameter values change.In this paper,we contend that the initial allocation of water rights is a dynamic variable that varies over time and suggest that the government could adjust initial water rights based on real-time feedback from enterprises regarding water conservation,usage and procurement in order to prevent water waste.The results show that the initial water right allocation,the initial reserve price of the product and the initial reserve price of the water right can interact with each other.Meanwhile,the production planning,water conservation planning,water purchase decision and initial water right allocation of the firm are affected by the initial reserve price of the product and the initial reserve price of the water right.
differential gameoligopoly competitionwater use efficiencywater rightscost of water purchases
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