Decision-making models for promoting consumption of low energy-intensive broadband terminal products in the Chinese telecommunication industry

Abstract

PurposeThe purpose of this paper is to extend game analysis to explore decision-making mechanisms for promoting a specific type of products, low energy consumption for individual one while the total energy consumption is huge due to the high quantity of sales, that is, low for individual and high for total (LIHT) in terms of energy consumption.Design/methodology/approachGame models are developed to compare decisions of optimal prices for newly developed and environmentally friendly (NDEF) and regular products as well as associated sales quantity, profits, carbon emissions under different governmental policies, along with a case of low energy-intensive broadband terminal products in the Chinese telecommunication industry under the carbon tax and subsidy policies.FindingsFor both NDEF and regular products, optimal prices decrease under the subsidy policy while both increase under the tax policy. Manufacturers’ decision of optimal prices is highly relevant with unit carbon tax/subsidy and the consumers’ preference. Both the tax and subsidy policies can improve consumption of NDEF products while the subsidy policy can be more effective at the current initial stage.Research limitations/implicationsThis paper provides decision support for manufacturers to promote sustainable consumption of LIHT products. Research ideas on models development and solutions for optimal prices can be applied to other LIHT products.Practical implicationsThe results provide insights for governments on how to effectively evaluate and motivate sustainable consumption for LIHT products.Originality/valueThis paper first explores how to motivate sustainable consumption of LIHT products by developing models, examining effectiveness of potential governmental policies as well as associated carbon emissions.