A duopolistic game for designing a comprehensive energy-efficiency scheme regarding consumer features: Which energy policy is the best?

Abstract

Governments design energy-efficiency programs (EEPs) to reduce the energy consumption of the energy-intensive sectors. In this paper, we propose a comprehensive EEP for the industrial and household sectors as a multi-agent problem. A sustainable supply chain consisting of an energy supplier, an energy-efficient manufacturer, and a conventional manufacturer is considered on this matter in a duopoly. Some energy policies under direct, indirect, and combined intervention are applied by the government to improve the cost-effectiveness of the program. In addition, the authors investigate the rebound effects of energy consumption in both sectors, under the consumer behavioral intentions i.e., the efficiency-related awareness, loyalty, and income level as a novel contribution. A multi-stage model is extended based on Cournot model to formulate the problem. The scenarios’ comparison and sensitivity analysis of the equilibrium decisions indicate that energy financial policies (e.g., energy tariff) encourage the manufacturers to follow the energy-efficiency path upon their high-energy-consuming products and processes. The combined intervention is more effective than the unilateral policies to reduce energy intensity and increase the energy-saving and social welfare of the industrial and household sectors, respectively. The industrial tariff also seems to be more powerful policy than consumer tariff and energy-efficiency awareness to satisfy the investigated energy-related targets. Finally, the present study provides a management point of view of a sustainable supply chain for energy policy-makers.