The research, led by Duc Nghia Vu of VNU University of Economics and Business in Hanoi with colleagues Thi Hong Ngoc Nguyen and Thi Mai Huong Nguyen, introduces what the authors call a Historical Incentive Translation Framework. The idea is deceptively simple: take documented institutional rules from historical sanitation systems, convert them into parameterized non-cooperative games played by rational, utility-maximising agents, and identify the precise conditions under which cooperation was sustained. The historical stability of these systems suggests, the authors note, that the observed outcomes were Nash equilibria of the games they specify. Two complementary strategic archetypes anchor the analysis: common-pool resource management, examined through Vietnam’s double-vault composting tradition, and principal-agent moral hazard, examined through England’s gong farmer contracts.

Vietnam’s double-vault composting latrines are a striking example of decentralised, self-enforcing commons governance. Households shared collection points and composting facilities, and the fertiliser output was distributed only to households that contributed suitable organic matter, free of non-compostable trash and chemicals. The authors model this first as a threshold public good game, in which the compost is saleable only if the number of cooperating households meets a minimum threshold. Their formal analysis reveals a fundamental weakness: when benefits are non-excludable, universal cooperation is not a Nash equilibrium, because any cooperator can gain by defecting while still enjoying the shared benefit. Universal defection, meanwhile, is always an equilibrium. The historical system avoided this trap by making the benefit excludable, transforming the communal latrine into what game theorists call an excludable club good.

The mathematics shows why this modification was decisive. Under excludable benefits, a defector receives zero regardless of what others do, so universal cooperation becomes a Nash equilibrium whenever the per-household benefit of compost exceeds the private cost of cooperation. Even more striking is the repeated-game extension: with non-excludable benefits, sustaining cooperation requires households to be sufficiently patient, with a discount factor of at least the cost-to-benefit ratio. With excludable benefits, that patience requirement is eliminated entirely, because the temptation to free-ride is removed at the source. The authors argue this formalises Elinor Ostrom’s foundational design principles for sustainable commons governance: clear membership boundaries, proportional benefit sharing, and monitoring. The graduated sanction scheme of the Vietnamese system, warnings, fines and ultimately exclusion from the fertiliser share, maintained the excludability condition, and the model predicts the design should sustain cooperation even among relatively impatient households, consistent with the system’s persistence through political and economic upheaval.

England’s gong farmers, the night-soil collectors of pre-industrial towns, present the second archetype: a principal-agent contract under moral hazard with imperfect verification. A landlord values a legally emptied cesspit, but cannot directly observe whether the collector transported the waste to a designated farm or dumped it in a river. The historical solution was a receipt system: the collector was paid only upon presenting a farmer’s receipt certifying delivery, and failure to produce one meant no payment, often a fine, and sometimes exclusion from the guild. The authors formalise this with a binary verifiable signal, where the probability of a receipt given honest disposal is α and the probability of a false or forged receipt given illegal dumping is β, with β strictly below α. The incentive compatibility condition requires the payment to be at least the extra cost of honest disposal divided by the signal gap α minus β.

The comparative statics of this contract yield insights directly relevant to modern desludging operations. As verification worsens, the required nominal wage rises, but when the participation constraint binds, the principal’s expected payment stays constant, because the higher wage exactly offsets the lower probability of payment; the cost is instead borne through increased income variance for the agent. As forgery becomes more widespread, the incentive constraint tightens, and when the signal gap approaches zero the required wage diverges and the contract becomes infeasible. The historical receipt system worked because the receiving farmer was a reliable third party, making α close to one, while guild oversight and municipal licensing made forgery costly, keeping β close to zero. The same logic applies today to desludging trucks equipped with GPS or blockchain-enabled delivery verification, though modern systems introduce new failure modes such as signal loss in dense urban areas, spoofing, and collusion with plant operators.

To illustrate the framework’s practical power, the authors present a Monte Carlo numerical illustration calibrated with plausible cost ranges. Under idealized verification conditions, a receipt-based payment contract achieves full compliance across a wide parameter space, whereas status-quo payment structures produce substantially lower compliance, approximately 21 percent in the numerical illustration, under the same conditions. The authors are careful to stress that these results are conditional on the maintained assumptions of the models and serve as a proof-of-concept rather than empirical validation. Even so, the gap between roughly full compliance and roughly one-fifth compliance under identical conditions is a vivid demonstration of how payment structure, not just monitoring technology, determines whether circular sanitation works.

The framework extends beyond these two archetypes into market creation and norm dynamics. A coordination game with network effects captures the chicken-and-egg problem facing source-separating toilets: a collection and composting market is viable only above a critical participation threshold, and the game has two stable equilibria, universal participation and universal non-participation. Historical systems, the authors suggest, escaped the low-participation trap because the Vietnamese state acted as a large player that forced or heavily subsidised initial participation, pushing the population across the tipping point, after which full participation became self-enforcing and the intervention could be withdrawn. A guaranteed offtake contract from a municipal composting plant, offering a minimum participation bonus for early adopters, could in theory eliminate the same trap today. An evolutionary model of cooperative disposal norms, meanwhile, shows that proper disposal becomes evolutionarily dominant once the product of detection probability and penalty exceeds the gap between private cost and public benefit, explaining why historical systems collapsed when guilds and local courts weakened.

The framework’s ultimate contribution is decoupling historical incentive logic from historical technologies and re-embedding it within modern, WHO-compliant safety protocols. This yields two actionable design instruments: verified-delivery contracts for desludging operators, potentially structured as two-stage payments with 70 percent released upon verified delivery and 30 percent upon treatment quality confirmation, and community governance charters for shared composting facilities built on excludable benefits, graduated sanctions and clear membership. The authors also derive a bilateral bargaining model of night-soil pricing that explains documented historical price reversals, in which farmers paid collectors in times of fertiliser scarcity and collectors paid farmers when supply was overabundant, as shifts in fertiliser value, delivery cost and bargaining power. In modern terms, the nutrient loop closes spontaneously whenever the avoided disposal cost plus fertiliser value exceeds delivery cost.

The study, published open access on 04 October 2026 and citable under DOI 10.1007/s43621-026-04799-x, received no external funding and the authors declare no competing interests. Its implications reach well beyond sanitation engineering. If the incentive architectures that kept pre-industrial nutrient loops closed for centuries can be parameterized, tested and re-embedded in modern safety-compliant systems, cities may be able to design sanitation that is simultaneously safe, circular and self-enforcing, harnessing self-interest rather than external command. The authors propose a field experiment design that would require ethical review before implementation, and they call for future empirical work to estimate the key parameters, including fertiliser value, delivery cost, benefit-sharing ratios, participation thresholds and detection-penalty products, in contemporary settings. The message is provocative: the blueprints for closing today’s broken nutrient loop may already exist, written centuries ago in the institutional rules of Vietnamese villages and English market towns, waiting to be read with the tools of modern game theory.

Subject of Research: Game Theory

Article Title: Game theoretic translation of historical incentive architectures into modern circular sanitation contracts and commons governance in Vietnam and pre industrial England

Article References: Vu, D. N., Nguyen, T. H. N., & Nguyen, T. M. H. (2026). Game theoretic translation of historical incentive architectures into modern circular sanitation contracts and commons governance in Vietnam and pre industrial England. Discover Sustainability. https://doi.org/10.1007/s43621-026-04799-x

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04799-x

Keywords: circular economy, nutrient recovery, game theory, historical sanitation, principal-agent, common-pool resources, Vietnam, incentive design, sanitation contracts, commons governance, Game, theoretic