Multiplayer Strategic Evolutionary Game Model Analysis on the Ban of Single-use Plastic Bags Under the Pakistan Environmental Protection Act 2019

This paper has looked at the response of plastic manufacturers and retailers after introducing the Pakistan Environment Protection Act of 2019. This paper analyzes the behavior of government, manufacturers and retailers using the evolutionary game theory model. This model was used to test hypotheses about various characteristics of the three players. The main variables selected for this purpose include the probability of adoption of business process innovation, the probability of monitoring, the income manufacturers and retailers can expect from innovation and costs associated with non-compliance with regulations. Furthermore, simulation analysis was conducted to examine equilibrium strategies’ stability. Additionally, a small survey was conducted in Lahore and Islamabad on plastic bag manufacturers and retailers to find empirical support for our research. This study makes a significant contribution to the existing literature on environmental regulations because it highlights the conditions in which a ban on plastic bags can effectively reduce plastic bag usage. Simulation analysis reveals that environmental policies on plastic bags can be more successful if an incentive-based approach is used by governments as strict enforcement leads to high monitoring costs which is not feasible in the long run. Survey analysis provides support to the findings as it shows that retailers and manufacturers are discouraged by the high costs of manufacturing and distributing environment friendly bags. This study carries significant policy implications for key stakeholders; the government should give subsidies and tax incentives to manufacturers and retailers for adopting business process innovation and using environmentally friendly bags.