Technology R&amp;D and sharing in carbon emission reduction in a duopoly

We 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.

Section: Literature Reviewmentioning

confidence: 99%

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

Lin,

Liu,

Zhang

2024

“…The inverse demand function is

p = a - q_{1} - q_{2}

, where

a

is a constant and

q_{i}

is the output of firm

i

(

i = 1, 2

). Firm 1 has relatively advanced emission‐reduction technology, and the cost function is

c_{1} = d \frac{{θ_{1}}^{2}}{2} + m e_{1}

(Chen et al, 2022).

d

is the cost coefficient, which is negatively associated with technology level,

0 < d < 1

.…”

Section: Model Setupmentioning

confidence: 99%

“…Multiple factors affect the achievement of sharing agreements. Chen et al (2022) explored the effects of product differentiation, R&D costs, and cost allocation on equilibrium results. The results demonstrated that technology‐sharing fees affect the attainment of sharing agreements.…”

Section: Literature Reviewmentioning

confidence: 99%

Unilateral cross‐ownership and emission‐reduction technology sharing in a duopoly

Chen,

Sun,

Liu

2023

Self Cite

This study constructs a Cournot duopoly model that considers unilateral cross‐ownership and emission‐reduction technology sharing, compares the equilibrium results under different cases, explores the impacts of unilateral cross‐ownership and technology sharing, and analyzes the boundary conditions for realizing technology sharing. The results indicate that unilateral cross‐ownership has complex effects on the equilibrium results. Emission‐reduction technology plays a positive role in improving environmental and social welfare. Furthermore, the boundary conditions of technology sharing were found to be affected by the carbon tax, cost‐reduction effect of emission‐reduction technology, and cross‐ownership.

“…They found that when the private firm is the patentee, all the two types of licensing contracts (i.e., fixed fee and royalty) are optimal. Chen et al (2022) construct a duopoly model considering technology R&D and technology sharing in carbon emission reduction, and analyzes firms' emission reduction technologies R&D decisions and technology sharing decisions. To sum up, the foregoing studies mainly focus on factors such as demand uncertainty, technology licensing decisions, and contract types.…”

Section: Literature Reviewmentioning

confidence: 99%

“…They found that when the private firm is the patentee, all the two types of licensing contracts (i.e., fixed fee and royalty) are optimal. Chen et al (2022) This study also draws from literature on government subsidies (Bian & Zhao, 2020;Kalish & Lilien, 1983;Wang et al, 2021;Zhao et al, 2018). Toshimitsu (2010) constructed the Cournot duopoly competition model of product differentiation, and studied the optimal subsidy policy of the government when considering environmental and welfare effects.…”

Section: Literature Reviewmentioning

confidence: 99%

Green technology licensing: Evaluating government subsidies based on different efficiency levels across competitors

Sun

2022

Green technology development results in manufacturers in traditional industries reducing carbon emissions to alleviate pressure on the ecological environment. Some manufacturers efficiently adopt this green technology and some do not. An effective green technology licensing strategy can promote the diffusion of technology from highly efficient manufacturers to those who are less efficient. The government has implemented subsidies to promote green technology among manufacturers. Manufacturers with high levels of technology efficiency should obtain a high level of licensing income; however, it is unclear whether these licensing rewards are effective, especially in the face of fierce market competition. What is the government's optimal subsidy policy to address this problem? In this study, given a possible government subsidy, we develop a game theory model that includes Manufacturer H, with relatively high green technology investment efficiency, and Manufacturer L, with low levels of efficiency. The two manufacturers engage in a two-dimensional competition in green technology investment and sales volume. We examine the manufacturers' profitability with and without green technology licensing, called Scenario Y and Scenario N, respectively. We identify "win-win" situations for the two competing manufacturers. Specifically, the government should increase the subsidy when the efficiency of industrial green investment is low, Manufacturer L has a clear disadvantage with respect to efficiency, and the competition is fierce.