Abstract: Industrial growth and development are among the integral components of economic development in developing countries such as Iran. Markazi province in the central part of Iran is one of the most prone areas for industrial progress due to its geopolitical location, proximity to the capital and major cities, and access via Iran’s western corridor. Over the last few decades, the concentration of major industries in combination with a lack of environmental safeguards have led to major environmental concerns, such that the province’s industrial development faces serious challenges going forward. This paper analyzes how to resolve these challenges through strategic analysis of stakeholder interactions using a Graph Model for Conflict Resolution, i.e., a non-cooperative model of game theory. Results indicate that, from a strategic point of view, the main cause of the conflict is over physical industrial land development in Markazi province by way of rationality and organizational benefits from stakeholders. It was shown that the insistence from the Industry and Mining Organization on industrial development and the Department of Environment on the preservation of natural resources and the environment, on the one hand, and the prevention of their further destruction, on the other, have made it difficult to find a cooperative solution. The findings further unveiled that in a non-cooperative scenario (i.e., the current situation), the equilibrium point of the conflict is status 16 (i.e., among the 18 situations) and no unilateral progression from either party can be detected. Via the equilibrium point, if the current preferences of the parties cannot be resolved, the conflict will remain at a deadlock leaving the environment at risk of further degradation.
