Selection of energy source and evolutionary stable strategies for power plants under financial intervention of government

Currently, many socially responsible governments adopt economic incentives and deterrents to manage environmental impacts of electricity suppliers. Considering the Stackelberg leadership of the government, the government’s role in the competition of power plants in an electricity market is investigated. A one-population evolutionary game model of power plants is developed to study how their production strategy depends on tariffs levied by the government. We establish that a unique evolutionary stable strategy (ESS) for the population exists. Numerical examples demonstrate that revenue maximization and environment protection policies of the government significantly affect the production ESS of competitive power plants. The results reveal that the government can introduce a green energy source as an ESS of the competitive power plants by imposing appropriate tariffs.

[1]  Chaolin Li,et al.  A game-theoretic analysis of implementation of cleaner production policies in the Chinese electroplating industry , 2010 .

[2]  J. M. Smith,et al.  The Logic of Animal Conflict , 1973, Nature.

[3]  Market power analysis in electricity markets using supply function equilibrium model , 2004 .

[4]  Werner Güth,et al.  Is altruism evolutionarily stable , 1998 .

[5]  D. Fullerton,et al.  Policies for Green Design , 1996 .

[6]  T. Riechmann.  Genetic algorithm learning and evolutionary games , 2001 .

[7]  Ashkan Hafezalkotob,et al.  Competition of two green and regular supply chains under environmental protection and revenue seeking policies of government , 2015, Comput. Ind. Eng..

[8]  Tiaojun Xiao,et al.  Wholesale pricing and evolutionarily stable strategies of retailers with imperfectly observable objective , 2009, Eur. J. Oper. Res..

[9]  D. Friedman.  EVOLUTIONARY GAMES IN ECONOMICS , 1991 .

[10]  I. Dobbs,et al.  Litter and Waste Management: Disposal Taxes versus User Charges , 1991 .

[11]  Y. Ni,et al.  Existence & uniqueness of consistent conjectural variation equilibrium in electricity markets , 2005, IEEE Power Engineering Society General Meeting, 2005.

[12]  Önder Güler,et al.  Wind energy status in electrical energy production of Turkey , 2009 .

[13]  Maria Teresa Vespucci,et al.  Cournot equilibria in oligopolistic electricity markets , 2010 .

[14]  D. Menniti,et al.  Simulation of producers behaviour in the electricity market by evolutionary games , 2008 .

[15]  Ting Zhang,et al.  Green supply chain coordination with greenhouse gases emissions management: a game-theoretic approach , 2016 .

[16]  Juri Hinz.  Equilibrium strategies in random-demand procurement auctions with sunk costs , 2006 .

[17]  Ahmad Makui,et al.  Source selection problem of competitive power plants under government intervention: a game theory approach , 2014 .

[18]  Alistair Ulph,et al.  Environmental policy and international trade when governments and producers act strategically , 1996 .

[19]  R. Cerqueti,et al.  Corruption, evasion and environmental policy: a game theory approach , 2016 .

[20]  T. Dinan,et al.  Economic Efficiency Effects of Alternative Policies for Reducing Waste Disposal , 1993 .

[21]  E. N. Barron,et al.  Game Theory: An Introduction , 2008 .

[22]  Oz Shy.  How to Price , 2008 .

[23]  Jörgen W. Weibull,et al.  Evolutionary Game Theory , 1996 .

[24]  Margaret Walls,et al.  Upstream Pollution, Downstream Waste Disposal, and the Design of Comprehensive Environmental Policies , 2001 .

[25]  A. Hafezalkotob.  Competition, cooperation, and coopetition of green supply chains under regulations on energy saving levels , 2017 .

[26]  James Webb.  Game Theory: Decisions, Interaction and Evolution , 2006 .

[27]  Xavier Vives.  Cournot oligopoly: On the efficiency of Bertrand and Cournot equilibria with product differentiation , 1989 .

[28]  Anna Nagurney,et al.  Modeling Generator Power Plant Portfolios and Pollution Taxes in Electric Power Supply Chain Networks: A Transportation Network Equilibrium Transformation , 2006 .

[29]  Seung-Hoon Yoo,et al.  WILLINGNESS TO PAY FOR GREEN ELECTRICITY IN KOREA: A CONTINGENT VALUATION STUDY , 2009 .

[30]  Qingyun Xu,et al.  Analysis of Supply Chain under Different Subsidy Policies of the Government , 2016 .