A Duopoly Manufacturers’ Game Model Considering Green Technology Investment under a Cap-and-Trade System

Yi Zheng, Gaoxun Zhang and Weiwei Zhang
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Yi Zheng: Department of Industrial Engineering, School of Management, Xihua University, Chengdu 610039, China
Gaoxun Zhang: School of Science, Southwest University of Science and Technology, Mianyang 621010, China
Weiwei Zhang: School of Management, Xihua University, Chengdu 610039, China

Sustainability, 2018, vol. 10, issue 3, 1-11

Abstract: This research studied the duopoly manufacturers’ decision-making considering green technology investment and under a cap-and-trade system. It was assumed there were two manufacturers producing products which were substitutable for one another. On the basis of this assumption, the optimal production capacity, price, and green technology investment of the duopoly manufacturers under a cap-and-trade system were obtained. The increase or decrease of the optimal production quantity of the duopoly manufacturers under a cap-and-trade system was decided by their green technology level. The increase of the optimal price as well as the increase or decrease of the maximum expected profits were decided by the initial carbon emission quota granted by the government. Our research indicates that the carbon emission of unit product is inversely proportional to the market share of an enterprise and becomes an important index to measure the core competitiveness of an enterprise.

Keywords: cap-and-trade; green technology investment; duopoly; game theory (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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