Strategic analysis of green technology unilateral licensing under carbon cap‐and‐trade policy

Abstract

AbstractWe investigate green technology unilateral licensing strategies between two competing manufacturers under carbon cap‐and‐trade policy. We construct Nash game models and compare the optimal strategies in the unilateral licensing situation with the no‐licensing situation. Comprehensive numerical experiments are taken to investigate the influence of some key parameters on optimal decisions. Our findings show that the green technology unilateral licensing strategy may benefit consumers; when green technology improvement is high, manufacturers tend to take the unilateral licensing strategy to obtain more profits; when initial unit carbon emission difference is moderate or large, the optimal strategy is that the manufacturer with lower level of green technology acts as the licensor; green technology unilateral licensing strategy may not necessarily reduce all manufacturers' total carbon emissions; only when green technology improvement is high, the unilateral licensing strategy is beneficial to environmental protection.