The governance of rent‐seeking behavior in carbon asset pledge financing: An evolutionary game perspective

Abstract

As an emerging financing model in the carbon financial market, carbon asset pledge financing (CAPF) has received extensive attention from governments and firms with the advance of low‐carbon economy. Since enterprises, banks, third‐party carbon asset evaluation agencies (TCAs), governments, etc, are involved in the operation of CAPF, driven by information asymmetry and the interaction among different stakeholders, rent‐seeking behavior is easy to occur in CAPF. This paper develops an evolutionary game model to investigate the rent‐seeking behavior in CAPF among different stakeholders. In addition, the risk‐sharing and penalty mechanisms are also taken into account. Subsequently, we examine the effect of relevant parameters on the dynamic evolution strategy of all parties in CAPF rent‐seeking through numerical examples. The results show that the governance of rent‐seeking behavior in CAPF needs the cooperation of different participating entities, the improvement of carbon financial market can reduce the occurrence of rent‐seeking behavior in CAPF. Compared with firms, TCAs are more susceptible to opportunism. Additionally, both the risk‐sharing mechanism and the penalty mechanism can effectively reduce the occurrence of rent‐seeking behavior. This paper contributes to the management of CAPF, and managerial insights for the governance of rent‐seeking behavior in CAPF are also provided.

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Evolutionary game analysis of rent seeking in inventory financing based on blockchain technology

“…Their active engagement in collusive relationships through certain means (usually bribes) with financially demanding firms is in line with the principle of “rent‐seeking” theory, that is, regulators take their own power as leverage to interfere with the economic activities to seek excessive profits, which causes consequent loss of benefits for the law abiding, increased inequity in the regulated industry, and reduced system efficiency (Krueger, 1974; Murphy et al, 1993). Literature on rent‐seeking theory has received consideration in industries covering environment regulations (Du et al, 2021), retail supervision (Ogbuabor et al, 2023), and banking regulation (Fu et al, 2023). Preliminary research in supply chain finance on the theory has also been conducted.…”