Enhancing Inland River Shore Power Utilization: A Game Theory and Prospect Theory Approach to Optimizing Incentive Mechanisms

Abstract

The development of the shipping and port industry has significantly driven both the Chinese and global economies. However, the environmental impact of their carbon footprint cannot be overlooked. Recently, the industry has made strides in implementing various environmental protection measures, with the promotion and adoption of shore power technology in inland port areas emerging as promising avenues for sustainable development. Despite widespread promotion and the establishment of shore power facilities in inland river areas, the utilization rate remains low. This is primarily due to the minimal benefits that inland river ships gain from using shore power, which often fail to meet their expectations. The traditional income function based on rational agent theory is inadequate, leading to existing incentive measures that do not effectively encourage shore power usage by inland river ships. Therefore, it is essential to analyze this issue from the perspective of behavioral economics. This paper introduces the reference point effect from prospect theory and designs an incentive mechanism for inland river shore power based on game theory principles. The goal is to explore how government subsidies and penalties can be adjusted to create effective incentives for shore power usage, ultimately seeking to improve the adoption rate of shore power among inland river ships and enhance the overall environmental quality of inland river ports.