The System Dynamics (SD) Analysis of the Government and Power Producers’ Evolutionary Game Strategies Based on Carbon Trading (CT) Mechanism: A Case of China

Abstract

Climate warming caused by carbon emissions is one of the most serious problems faced by human beings, and the carbon trading (CT) mechanism is an effective way to promote carbon emission reduction and achieve green and low-carbon development. Scholars have mainly studied the impact of CT on the energy economy system, and few scholars studied the game process and behavior strategies of government and power producers in the implementation of a CT mechanism. This paper will fill this gap. This paper firstly constructs the evolutionary game model of government and power producers based on CT, and then simulates the evolutionary process of game behavior strategies by establishing a system dynamics (SD) model, and finally studies the influence of government controllable key factors on system stability. The combination of evolutionary game and SD in our study not only clearly reveals the complex and dynamic evolution process of game models under bounded rationality, but also provides a qualitative and quantitative simulation platform for analyzing the dynamic game process between government and power producers. The results show that: (1) There is no evolutionarily stable strategy (ESS) in the game system between government and power producers under CT, and the system evolution is characterized by periodicity; (2) When the government implements dynamic subsidies or punitive measures, the mixed strategy of the game system has ESS; (3) Reducing the unit subsidy and raising the unit fine can both promote the participation of power producers in CT, but the former increases the probability of government supervision; thus, it is best to increase the fines when the government makes strategic adjustments, followed by reducing subsidies.

System Dynamics Analysis of Evolutionary Game Strategies between the Government and Investors Based on New Energy Power Construction Public-Private-Partnership (PPP) Project

“…We will study three scenarios to examine whether the game players will take the initiative to stabilize a saddle point. We compare the results of our study with that of [17,28,29], and find that the fluctuation trend of game players' probability and the evolution process of mixed strategy are roughly the same as those in the relevant references. This shows that the simulation results of our study are consistent with those of relevant scholars, and proves the correctness and rationality of the model built in this study.…”

“…Shen et al [16] combined an evolutionary game and SD simulation to study the cooperation mechanism of a government outsourcing public services. It can be seen that SD provides an effective aid for studying the complex dynamic process of evolutionary games in incomplete information conditions [17].…”

“…According to the method proposed by Friedman [20], the stability of local equilibrium of dynamic differential equations can be analyzed by the system's Jacobian of the system can be used to analyze. Thus, the stability of five equilibrium points described above can be analysis according to the Jacobian of Formula (17), which is:…”

Evolutionary Game Analysis of the Stress Effect of Cross‐Regional Transfer of Resource‐Exhausted Enterprises

“…Evolutionary game theory is an application of the mathematical framework of game theory to the dynamics of animal conflicts (including, of course, the conflicts in which people engaged) [32,33]. Following the development of evolutionary game theory, it has been widely used to analyse industrial transfer [34,35], pollution control [36][37][38][39][40][41], and policy-making [41][42][43].…”

Does Whistleblowing Work for Air Pollution Control in China? A Study Based on Three-party Evolutionary Game Model under Incomplete Information

“…On the other hand, although the whistleblowers are rewarded after the complaint is verified [20][21][22], in practice, they are often harassed in real life and their rights and interests are often violated [23,24], Sustainability 2019, 11,324 3 of 20 which to some extent demotivates the act of whistleblowing. In this case, the central environmental protection department, the local government, and the whistleblower constitute an evolutionary game under incomplete information [25][26][27].…”