IDEAS home Printed from https://ideas.repec.org/a/spr/endesu/v25y2023i12d10.1007_s10668-022-02643-6.html
   My bibliography  Save this article

Investigating cooperation between competitive manufacturers under the energy performance contracting mechanism

Author

Listed:
  • Wenjie Zhang

    (Guangxi Minzu University)

  • Lingling He

    (Southwest Jiaotong University)

  • Jing Liu

    (Guangzhou University)

  • Hongping Yuan

    (Guangzhou University)

Abstract

In a duopoly market, a superior manufacturer owns more efficient energy-saving technology in production than the inferior manufacturer. To improve the efficiency of energy-saving technology, technical cooperation is a critical option for the inferior manufacturer. However, unaffordable cooperation fees are generally regarded as one of the most significant barriers in technological advancement. To address this issue, this paper investigates cooperation between competitive manufacturers under the energy performance contracting (EPC) mechanism by developing game theoretical models. The findings show that (i) when both manufacturers engage in EPC cooperation, the market equilibrium price decreases and overall market product sales increase. (ii) The EPC cooperation decisions of the two manufacturers depend on the market size and the revenue sharing ratio. (iii) When the market is small, the optimal choice of the inferior manufacturer is to engage in EPC cooperation with the superior manufacturer. (iv) When the superior manufacturer retains part of its technology under EPC, there exists an optimal level of technical cooperation that can yield optimal benefits for both manufacturers. The findings are valuable not only in understanding competitive manufacturers’ optimal cooperation decisions under the EPC mechanism but also for inferior manufacturers seeking cooperation opportunities for technological advancement.

Suggested Citation

  • Wenjie Zhang & Lingling He & Jing Liu & Hongping Yuan, 2023. "Investigating cooperation between competitive manufacturers under the energy performance contracting mechanism," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(12), pages 14033-14061, December.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:12:d:10.1007_s10668-022-02643-6
    DOI: 10.1007/s10668-022-02643-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10668-022-02643-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10668-022-02643-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:endesu:v:25:y:2023:i:12:d:10.1007_s10668-022-02643-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.