An Evolutionary Game Analysis of Decision-Making and Interaction Mechanisms of Chinese Energy Enterprises, the Public, and the Government in Low-Carbon Development Based on Prospect Theory

Xiao Liu, Qingjin Wang (), Zhengrui Li and Shan Jiang
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Xiao Liu: School of Business, Qingdao University, Qingdao 266071, China
Qingjin Wang: School of Business, Qingdao University, Qingdao 266071, China
Zhengrui Li: School of Business, Qingdao University, Qingdao 266071, China
Shan Jiang: School of Foreign Language, Qingdao University, Qingdao 266071, China

Energies, 2025, vol. 18, issue 8, 1-20

Abstract: The low-carbon development (LCD) of energy markets not only serves as a critical enabler in combating global climate change and advancing the green economy but also enhances global industrial competitiveness. Grounded in prospect theory, this study develops a tripartite evolutionary game model involving three core energy market stakeholders, i.e., energy enterprises, the public, and the government, to investigate the determinant factors and decision-making mechanisms underlying the LCD of energy enterprises, with subsequent simulation analyses conducted through MATLAB R2024a. The research findings indicate that loss aversion serves as the primary driver for energy enterprises’ adoption of LCD strategies. Public supervision demonstrates optimal effectiveness only under conditions of low risk and low loss, while risk sensitivity remains the dominant factor influencing the government’s strategic choices. Notably, government incentives combined with public supervision demonstrate significant synergistic effects in accelerating the corporate transition toward LCD. Accordingly, the government should actively promote LCD strategies to mitigate transformation risks for energy enterprises while concurrently optimizing regulatory frameworks to reduce public supervision costs and amplify incentive benefits, thereby fostering active public participation in LCD.

Keywords: prospect theory; energy markets; low-carbon development; evolutionary game theory (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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