A sequential-move game for enhancing safety and security cooperation within chemical clusters

Area of Science:

• Industrial Economics
• Game Theory
• Chemical Engineering

Background:

• Chemical industrial clusters face risks from potential safety and security failures.
• Inter-company cooperation is crucial for mitigating risks like domino effects.
• Existing governance structures may not fully incentivize cooperative safety measures.

Purpose of the Study:

• To analyze strategic cooperation on safety and security in chemical industrial clusters using game theory.
• To determine the effectiveness of a Multi-Plant Council (MPC) as a leader in promoting cooperation.
• To develop a framework for achieving full cooperation and preventing domino effects.

Main Methods:

• A two-stage sequential move game model between chemical plants and an MPC.
• Analysis of the game as a 'coordination with assurance' game.
• Development of an algorithm for the MPC to design an optimal subsidy system.

Main Results:

• The MPC can achieve full cooperation by strategically implementing a subsidy system.
• The proposed game model demonstrates the role of cluster governance in risk mitigation.
• The study identifies Nash equilibrium strategies for individual companies responding to subsidies.

Conclusions:

• Cluster governance, through an MPC, is vital for fostering cooperative safety and security.
• The proposed algorithm and stepwise plan offer practical tools for enhancing safety management.
• Game theory provides a robust framework for understanding and improving inter-company collaboration in industrial settings.