Hoteling Price Competition Model Under the Carbon Emissions Constraints

Abstract

Nowadays, industry development with low-carbon has become a trend. How a energy-intensive company can get an advantages to adapt to the requirements of the carbon emissions policy? Because of the ignoring the carbon emissions factors, the original Hoteling model does not apply to the new circumstance easily. In order to provide a reference to the management of energy-intensive industries under this new challenge, we add the carbon emissions constraints to the Hoteling model in this paper. We confirm that the unit cost of carbon and carbon emissions quotas are directly related to the profits of enterprises. For the enterprise, one of the best way to increase the profit is to decrease the unit cost of carbon emissions of enterprises with advanced low-carbon technologies in the production process and to gain more carbon emission quotas rationally.