Investigating the Effect of Air Pollution Limitation on Iran’s Employment of Manufacturing Firms: Game Theory Approach

In a participatory economic model for regional air pollution, an important point is how to rationally and fairly allocate costs and benefits to participants. Based on this principle, much and extensive research has been conducted on topics such as the distribution of benefits by using cooperative game theory. In this study, the effect of air pollution limitation on Iran’s employment of manufacturing firms has been investigated. Based on the minimum costs-remaining savings (MCRS) method, the total benefits of manufacturing Firms and the level of employment of them with 10 labor and more in the interactive econometrics model are more than the case of reducing pollution alone. Vice versa, the cost of reducing carbon dioxide emission in the interactive econometric model is lower than in the case of pollution reduction alone. The results show that the presented interactive econometrics model is superior to the current separate control model in terms of increasing employment and economies of expense for the same level of pollution control. Therefore, the current results can provide an important reference to support the regional decision-making, in addition to promoting cooperation and achieving win-win outcome for the participants.