The Impact of Differentiated Carbon Taxes on New Enterprises’ Strategies When Entering Original Markets with Different Degrees of Market Competition

Jialin Zheng, Ya Zhou (), Keqiang Li, Yang Zeng, Ruining Wang and Canmin Zhang
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Jialin Zheng: School of Systems Science, Beijing Normal University, Beijing 100875, China
Ya Zhou: School of Systems Science, Beijing Normal University, Beijing 100875, China
Keqiang Li: School of Systems Science, Beijing Normal University, Beijing 100875, China
Yang Zeng: School of Systems Science, Beijing Normal University, Beijing 100875, China
Ruining Wang: School of Systems Science, Beijing Normal University, Beijing 100875, China
Canmin Zhang: School of Systems Science, Beijing Normal University, Beijing 100875, China

Mathematics, 2023, vol. 11, issue 9, 1-29

Abstract: We view the development of industries with various market competition levels as a dynamic process and investigate the game between a new entrant and the original market with variable market competition degrees under the premise of considering the entry and exit of companies in the industry. Based on this, we explore the prerequisites for the new firm to enter the initial market and construct a recursive formula for the optimal output of individual firms entering the market one at a time, as well as the conditions for the new firm to enter the market in the three scenarios of the original market being mixed strategy, low-carbon type, and traditional type, respectively, and the optimal decision-making behavior once entering the market. We create diversified carbon tax rates for various cost bands of low-carbon production patterns in order to modify the original traditional market and allow the new enterprise to enter the market using a low-carbon production strategy. We anticipate that our study will serve as a theoretical guide for accomplishing a low-carbon shift in production patterns.

Keywords: market competition; low-carbon production; new entrants; original market; game; carbon tax (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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