Elucidating competing strategic behaviors using prospect theory, system dynamics, and evolutionary game: a case of transjurisdictional water pollution problem in China.

Water is a critical natural resource for socio-economic and environmental systems. In transjurisdictional river basins, when basin-wide water pollution management scheme is absent, stakeholders tend to adopt utility-maximizing behavior based on incomplete information. Such a scenario could lead to a free-riding problem. This paper attempts to elucidate the strategic behavior of riparian regions using prospect theory, evolutionary game, and system dynamics. The evolution of riparian regions' strategic behaviors is explained, and the impacts of different factors on their strategic selections are simulated. The results showed that the prospective value of factors and stakeholders' attitude to risk are a key for resolving transjurisdictional river water pollution problems. Improving the subjective judgment of the probability of water pollution, raising awareness, strengthening the penalties in "polluter pays" schemes, abandoning segmented river basin management, and building a basin-wide water management system are vital for maintaining the ecological integrity of any transjurisdictional river basin and accelerate the sustainable development of its riparian regions.