Interaction between enterprises and consumers in a market of carbon-labeled products: a game theoretical analysis

This paper applies an evolutionary game theoretical analysis combined with system dynamics to model strategic interaction between enterprises and consumers with bounded rationality in a carbon-labeled product market. Through the game theoretical analysis, possible equilibriums are predicted between these two players, in order to provide market recommendations for promotion of carbon-labeled products. The simulation results indicated that it is impossible to promote the carbon-labeled products relying on the market’s inherent functions. After incorporating dynamic subsidies, both of the players have evolutionary stable strategies, revealing it has an incentive impact on the market. Limitations of the game theoretical analysis are discussed to lay out a foundation for further study.