Balancing Economic and Environmental Objectives in Agriculture: A Game Theory Analysis

Achieving sustainable agriculture requires a delicate balance between economic gains and environmental protection, especially in regions facing water scarcity and overuse of fertilizers. This study employs four game theory bargaining methods (Nash, Kalai-Smorodinsky, area monotonic, and equal loss function) to model this complex scenario and identify optimal agricultural practices. Results clearly demonstrate a trade-off between prioritizing environmental objectives, which necessitates significant fertilizer reduction, and maximizing economic profits. Several promising scenarios are identified, offering varying levels of fertilizer reduction and economic benefits. Notably, Scenario 6 demonstrates high potential for adoption due to its alignment with current practices and its ability to improve both economic outcomes and environmental sustainability. Scenario 6 reduces nitrate fertilizer usage by 15%. This study highlights the significant impact that the choice of game theory method has on determining optimal solutions and underscores the need to carefully consider stakeholder values and priorities. While the model offers valuable insights, real-world complexities like farmer behavior, market volatility, and climate change could influence the feasibility of solutions. Further research refining the model and incorporating these complexities, alongside thorough stakeholder engagement throughout the decision-making process, is essential for the successful implementation of sustainable agricultural transitions.