The Strategic Equilibrium Of Green Technology Strategy Under Competitive Environment

In the context of the increasing shortage of natural resources and severe environmental damage,the implementation of green innovation is the general trend.The paper studies the optimal product degree of greenness-price decision and the green decision-making of duopoly firms aiming to maximize profits when environmentally conscious consumers have a preference for green innovation firms,as well as the equilibrium strategy of green technology adoption.First,build a degree of greenness and price competition decision-making model for the duopoly,and derive the optimal strategy for firms under three competitive scenarios.The results show that different competitive scenarios have different impacts on the optimal strategies of the duopoly.Whether firms adopt green technology will be greatly affected by the consumer’s environmental awareness,the loyalty to green product,the green innovation cost and the product’s variable production cost,as well as the green strategical choices of competitors.Secondly,by comparing profits,it can be concluded that the equilibrium strategy of green technology adoption of the duopoly,as well as evaluate equilibrium strategies with the objectives of maximizing consumer surplus and minimizing negative externalities of the environment.The results show that a uniform non-green strategy will be the Nash equilibrium choice of two firms rather than a green strategy or a mixed strategy where one is green and the other is non-green,which call for further government interventions to promote the green innovation and consumption.In addition,considering the consumer surplus and environmental impact of equilibrium strategies,it is found that a uniform green equilibrium strategies do not always benefit consumers,but they often bring minimal environmental negative externalitiesFurthermore,the innovation subsidy mechanism and product subsidy mechanism are included in the competition model,and the impact of the subsidy coefficient and the number of product subsidies on the equilibrium strategy of green technology adoption by the duopoly is analyzed.The results show that the green subsidy mechanism and competition situation have a significant impact on the adoption of optimal strategies for green technology by the duopoly.Under the(adoption,non-adoption)competition scenario,both subsidy mechanisms can improve the degree of greenness and profits;while(adoption,adoption)two subsidy mechanisms can enhance the degree of greenness cannot increase the profitability of green firms.In addition,in order to improve social welfare,both subsidy mechanisms have applicable conditions,and numerical analysis reveals that the product subsidy mechanism requires a minimum subsidy amountFinally,managerial implications pertaining to green innovation are provides for firms who in different industries and different green development stages,as well as for policy makers whether to design green subsidy mechanisms,and which one will be implement if the green subsidy mechanism designed.