Area Allocation of Industrial Subsidies Based on Combined Model of Data Envelopment Analysis and Game Theory

Industrial subsidies as an industrial policy, has a history as old as economics and during different periods has been employed as a supportive tool by different countries. However, effective and optimal distribution of these subsidies has always been a crucial problem for planning and policy making. In this regard, the current study while examining industrial subsidies from theoreticaland empirical aspects, a model is provided for allocating industrial subsidies to 31 provinces of the country according to four effective criteria. For this purpose, the study has employed ZSG-DEA model which is a combination of the data envelopment analysis with game theory. The results of the proposed model which determine the optimal share of each province, indicate that Tehran province with 23.25 percent share has the highest optimal share and Ilam, Kohgiluyeh and Boyer-Ahmad provinces with 0.2 percent share have the lowest optimal share of industrial subsidies. After determining the optimal share of support funds in each province, it is suggested that the method of payment of these support resources to the provinces be determined according to the effects of different types of support and type of industries in each province.