Differential Game Model for Disaster Relief Cooperation between Host Government and Private Sector

Abstract

The decision of the private sector to fulfil corporate social responsibility (CSR) has become an issue of common concern for the host country government and the private sector in collaborative disaster relief. From the perspective of social responsibility, this paper describes the different cooperation strategies of non-cooperation, cost subsidy, and collaborative cooperation, and constructs a differential game model of disaster relief cooperation between the government and the private sector. The rate of reputational decay has a significant effect on system benefits. The optimal CSR cost subsidy rate is related to marginal revenue and has nothing to do with other factors. Compared with the non-cooperative case, in the situation of the cost of subsidies, as the host country government and marginal revenue is greater than the private sector of the marginal revenue through government subsidies for the private sector in CSR and the government's optimal level of CSR efforts remained unchanged, the optimal level of CSR efforts to improve the private sector, the government, and the private sector's earnings are improving; Compared with the cost subsidy, the optimal CSR effort level of the government and the private sector increases in the case of collaborative cooperation, and so does the system benefit.

Keywords:  disaster relief; differential game; corporate social responsibility; cost of subsidies