Evolution delayed decision game based on carbon emission and capacity sharing in the Chinese market

Abstract

Based on the carbon emission policy and low-carbon capacity sharing, this paper studies the optimal product pricing and capacity matching strategies of competition and cooperation between two companies in a duopoly market. And the optimal strategies with or without capacity sharing are discussed. In addition, a differential game model based on carbon emission constraints, low-carbon capacity sharing, and delayed decision-making is established. We also study the evolution of duopoly enterprises from the initial state to the equilibrium state. Besides, the influence of delayed decision variables, price adjustment speed and decision weights on the stability of the game system is analyzed. The results show that the government can effectively intervene and guide the enterprises’ low-carbon production strategy through carbon emission restriction policy. Low-carbon capacity sharing is beneficial to both enterprises, and the demand side benefits more than the supply side. We discuss the impact of stable and unstable systems on enterprises’ decisions. When the system is stable, enterprises can converge from different initial game states to equilibrium states. The adoption of a delay strategy will not affect the tendency of convergence to the equilibrium. Furthermore, the system using the variable feedback control method is of higher stability.