3.1. Analysis of the stability of the strategy of the three game subjects
3.1.1. Analysis of the stability of farmers’ strategies
Taking the derivation of the farmer’s replicator dynamics equation
with respect to
, we can obtain:
According to the stability theorem of the differential equation, the probability of farmers choosing outsourced control is in a stable state and must meet
and
. Therefore, when
,
and
, at this time whatever value
takes is in the evolutionary stable state; when
,
and
, at this time
is the farmer’s evolutionary stabilization strategy; conversely,
and
when
, at which point
is the farmers’ evolutionary stabilization strategy. The evolution phase diagram of farmers is shown in
Figure 3:
Figure 3 shows that the probability of farmers steadily choosing outsourced control and self control are the volumes of
and
, respectively. Through computation, we can obtain:
Inference 1: the probability of farmers’ stable choice of outsourced prevention and control is positively correlated to the government’s guidance and incentive supports and to the additional benefits brought by positive control services, but negatively to service costs .
Demonstration: according to the expression of the probability that the farmer chooses to outsource the control, the first-order partial derivatives of each element can be obtained as , , and . Therefore, the increase of and or the decrease of can increase the probability of farmers choosing outsourced control.
Reference 1 suggests that the guarantee of farmers’ economic benefits can promote their choice of outsourced control. First, the government implements guidance-based policies to change farmers’ perceptions and awareness, while the related price of the services is changed through subsidies, which, in turn, stimulates farmers to evolve towards outsourced control; secondly, farmers gain additional benefits by adopting positive control services, which is directly contributive to the outsourced control; and thirdly, the reduction in the cost of outsourced control services cuts down farmers’ operating expenses, which also helps to promote the choice of outsourced control.
Inference 2: in the evolution process, the probability X of farmers choosing to outsource the prevention and control will increase with the probability Y of service organizations providing positive services and with the probability Z of government applying policy tools.
Demonstration: according to the stability analysis of farmer’s strategy, indicates that is negatively correlated to Z. When , is the evolutionary stabilization strategy for farmers; conversely, when , is the evolutionary stabilization strategy for farmers. Thus, as Y and Z gradually increase, the stabilization strategy of farmers evolves from self-control to outsourced control.
Reference 2 suggests that enhancing the probability of service organizations to provide positive control services and that of the government to apply policy tools will help farmers choose outsourced control as a stabilization strategy. Government departments can not only positively promote service organizations to provide positive services through guidance- and incentive-based tools, but also increase the service cost for organizations with the help of regulatory penalties, which in turn inhibits their negative service behaviors. Namely, the government’s application of policy tools can help form a positive and orderly market for efficient services, and enhance the probability of service organizations to provide positive control services; farmers can gain additional benefits from these services, thus further driving them to choose outsourced control.
3.1.2. Analysis of the stability of service organizations
The derivation of the replicator dynamics equation
for the service organization with respect to
can obtain:
Similarly, according to the stability theorem of differential equations, when
,
, and
, at this time whatever value Y takes is in an evolutionary stable state; when
,
, and
, at this time
is the evolutionary stable strategy; when
,
, and
, at which point
is the evolutionary stabilization strategy. The evolutionary phase diagram of the service organization is shown in
Figure 4:
Figure 4 shows that the probability of stability section of positive and negative control services is volume
and
, respectively. Through computation, we can obtain:
Inference 3: the probability of service organizations stabilizing their choice of positive control services is positively correlated to government-directed support, incentive subsidies and regulatory penalties and reputation loss when negative services are provided, and negatively to the increased cost of positive services relative to negative services .
Demonstration: according to the expression of the probability of service organization choosing positive control services , the first-order partial derivative of each element is obtained as , , . Thus, either an increase in and or a decrease in can increase the probability that a service organization will choose positive control services.
Inference 3 suggests that ensuring the operating benefits of service organizations can promote service organizations to choose positive control services. First, the government enables the organizations to master advanced techniques and improve their professionalism through guidance-based policies, while the incentive-based policies guarantee that organizations can receive subsidies when they positively serve, thus prompting them to provide positive control services. In addition, regulatory penalties increase the cost of negative services and help to reduce opportunistic behavior. Secondly, the greater the loss of reputation of service organizations in providing negative services, the more difficult it is to secure their operating profits, which, in turn, motivates them to provide positive and effective services. Thirdly, the greater the difference between the costs of positive and negative services, the greater the room for service organizations to provide negative services profitably, and consequently, the organizations may take risks and choose to provide negative service to seek high profits.
Inference 4: in the evolution process, the probability Y of service organizations providing positive control services increases with the probability X of farmers outsourcing the services and with the probability Z of government applying policy tools.
Demonstration: through the stability analysis on service organization strategies, indicates that is negatively correlated to Z. When , is the evolutionary stabilization strategy for farmers; conversely, when , is the evolutionary stabilization strategy for farmers. Thus, as X and Z gradually increase, the stabilization strategy of the outsourcing organization evolves from negative to positive control services.
Inference 4 suggests that increasing the probability that farmers choose outsourced control and that the government applies policy tools can prompt service organizations to provide positive control services as a stabilization strategy. Therefore, to promote the formation and healthy development of agricultural PDCO market, and to ensure that service organizations provide positive and effective services, it is necessary for the governments to implement policy tools to guide and motivate farmers to raise production awareness, reduce service costs, and adopt outsourced control.
3.1.3. Analysis of the stability of the government’s strategies
Taking the derivative of the government’s replication dynamic equation
with respect to
, we can obtain:
Similarly, according to the stability theorem of differential equations, in the case of
, when
,
, and
, at this time whatever value
takes is in an evolutionary stable state; when
,
,
, at this time
is the evolutionary stable strategy ; when
,
,
is the evolutionary stabilization strategy. The evolutionary phase diagram of the government is shown in
Figure 5.
Figure 5 shows that when
, the probability that the government stably chooses the application or non-application of policy tools is the volume of
and
, respectively. Through computation, it can be obtained that:
In addition, when
, the probability of government stabilizing the application or non-application of policy tools is shown in the volume of
and
in
Figure 5 respectively, but at this time
, while the volume formula for
and
includes
, thus the discussions on farmers’ evolutionary strategies at
becoming meaningless. To sum up, only the relevant cases at the time of
will be discussed subsequently.
Inference 5: the probability of the government’s stable selection of policy tool application is positively correlated to the reputation loss when negative services from service organizations are not regulated, to the revenue from fines on negative services, and to special subsidies and incentives earned in the tripartite concerted control, but negatively to the total cost of implementing regulatory policies , to inputs in promoting guidance-based policies , and to subsidies and when implementing incentive-based policies.
Demonstration: according to the expression of the probability of the government’s stabilizing the application of policy tools, the first-order partial derivatives of each element are obtained as follows: , , , , , , , and . Therefore, the increase of , , and or the decrease of , , , and can all increase the probability of the government choosing to apply policy tools.
Inference 5 suggests that the key to the government’s application or non-application of policy tools is limited by fiscal pressures. The greater the reputation loss caused by the government’s inaction in the service organization’s negative control, and the higher the amounts of special subsidies and rewards given by higher authorities, the more it can motivate the government to strictly implement policy tools. In addition, setting a heavier penalty amount and greater penalty probability for negative services from service organizations can promote strict fulfillment of policy tools by government regulators. However, the higher the cost of implementing regulatory policies, the higher the inputs into the settings of incentive- and guidance-based policies, and the higher the financial burden of the government faces, which in turn reduces the probability of applying policy tools.
Inference 6: in the evolution process, the probability Z of government applying policy tools decreases with the increase of the probability X (of farmers outsourcing control services) and with the probability Y (of service organizations providing positive control services).
Demonstration: from the analysis on government strategy stability, when , indicates that is negatively correlated to Y. When , is the government’s evolutionary stability strategy; conversely, when , is its evolutionary stabilization strategy. Thus, as X and Y gradually increase, the government’s stabilization strategy evolves from application to non-application of policy tools.
Inference 6 suggests that increasing the probability that farmers choose to outsource control services and that service organizations adopt positive control services can both prompt the government to opt for non-application of policy tools as a stabilization strategy. After the probability that farmers choose outsourcing and that service organizations opt for positive control services reaches a certain level, government departments choose not to use policy tools as a stabilization strategy, in order to improve capital utilization and reduce financial burden. Therefore, when farmers and service organizations can effectively promote benign operation of PDCO, the government chooses not to intervene in PDCO system.
3.2. Stability analysis of equilibrium point of three-party evolutionary game system
From the replicator dynamics equation of the behavioral strategies of farmers, service organizations and the government, the replicator dynamics system for the three main players in agricultural pest and disease control can be obtained.
The Jacobian matrix
of agricultural pest and disease control:
According to Lyapunov’s first methodology, when all eigenvalues of Jacobian matrix
are negative, the equilibrium point is the asymptotic stability point; when at least one of the eigenvalues of Jacobian matrix
is positive, the equilibrium point is unstable. However, when Jacobian matrix
has zero eigenvalue and all the other eigenvalues are negative, the stability of the point cannot be determined. When
, 8 equilibrium points from replicator dynamics system for agricultural pest and disease control can be obtained. The evolution of mixed equilibrium points is not considered here, because the mixed equilibrium points must have the characteristic value of 0, which does not fit the evolutionary stability strategy. (ESS, evolutionarily stable strategy). Combined with the profit and loss variables settings and descriptions of the three subjects, the stability analysis of equilibrium point is shown in
Table 2. From
Table 2 it is easy to obtain that at the equilibrium points (0, 0, 0), (0, 1, 0), (0, 1, 1), (1, 0, 0) and (1, 0, 1) there exists at least one positive eigenvalue, therefore these five equilibrium points are not evolutionarily stable strategies.
Inference 7: When the condition ① is met, (0, 0, 1) in the replicator dynamics system is the equilibrium point.
Demonstration: under the condition ① , the equilibrium points of (0, 0, 1) have negative eigenvalues , thus at this time (0, 0, 1) is the asymptotically stability point of the system.
Inference 7 shows that when the cost difference between a positive service and a negative service is higher than the sum of the government’s guidance, subsidies, rewards and penalties, it indicates that potential benefits obtained by the organization from the government for the positive service cannot cover its increased cost, so it chooses to provide negative ones. For farmers, because of negative control services provided by service organizations, they cannot receive additional benefits from yield and quality, and the government’s guidance and incentive supports can hardly offset the service cost of outsourced control, as a result they turn to self control after comprehensive consideration of economic benefits. At this point of time, although the government applies policy tools, the guidance, rewards and penalties from policy tools are low, which has little effect on changing the behavior of farmers and outsourcing organizations.
Inference 8: when the condition ② is satisfied, (1, 1, 0) in the replicator dynamic system is the equilibrium point.
Demonstration: under the condition ② the equilibrium points (1, 1, 0) have negative eigenvalues, and thus at this time (1, 1, 0) is asymptotically stable points of the system.
Inference 8 shows that, when the sum of the cost in implementing the government’s PDCO policy is greater than the supports and rewards from the superior government, that is, when the government sets the guidance- and incentive-based policy tools at a higher level of support, the government will eventually not intervene in pest and disease control system through evolutionary game, and at the same time, both farmers and service organizations can achieve an ideal pest and disease control state on their own, indicating that both farmers and service organizations can gain higher benefits from it. After a benign and effective market operation system has been formed between farmers and service organizations, the government will no longer impose policy tools in consideration of fiscal savings.
Inference 9: when the condition ③ is satisfied, (1, 1, 1) in the replicator dynamic system is the equilibrium point.
Demonstration: under the condition ③, the eigenvalues of the equilibrium point (1, 1, 1) are all negative, thus at this point (1, 1, 1) is asymptotically stabilization points of the system.
Inference 9 shows that when the sum of government expenditures on policy tools is less than that of special subsidies and rewards from higher-level governments, that is, the regulation of policy tools is relatively small, the government can effectively regulate the behaviors of farmers and organizations by applying policy tools. This suggests that a "gradual and incremental" policy tool will not impose a fiscal burden on the government, and will guarantee market order free from disturbance. The “one-step but anticlimactic" policy tool may quickly achieve a good governance, but it will cause serious financial pressure to government departments, and most importantly, it may disrupt the order on the service market, thus not conducive to the stable and sustainable development of modern pest and disease control system.