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Journal ArticleDOI

A game-theoretic approach for electric vehicle adoption and policy decisions under different market structures

04 Mar 2021-Journal of the Operational Research Society (Taylor & Francis)-Vol. 72, Iss: 3, pp 594-611
TL;DR: Findings reveal that a combination of subsidy and green-tax can generate higher social welfare as compared to the use of only one of them under both monopoly and duopoly markets.
Abstract: The transport sector is one of the largest contributors to rising greenhouse gas (GHG) emissions in the world. With no tailpipe emissions, electric vehicles (EVs) can be one of the ways to reduce G...
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TL;DR: In this paper, the authors studied a vehicle supply chain and formulated four different modes of developing charging infrastructures for EVs when: (a) EV manufacturer invests in setting up the charging infrastructure with a government subsidy to EV consumers, namely the Model M, (b) Government invests in charging infrastructure and also provides a subsidy to EVs consumers, such as the Model MG, and (c) Government invested in the Model G.
Abstract: Electric mobility has emerged as a key initiative for the policymakers and the governments to mitigate the carbon footprint of the transportation sector. However, the adoption of electric vehicles (EVs) is slow, primarily due to the scarcity of adequate charging facilities. The intriguing factor in terms of developing charging infrastructure is related to which entity should invest in developing the same. Herein, we study a vehicle supply chain and formulated four different modes of developing charging infrastructures for EVs when: (a) EV manufacturer invests in setting up the charging infrastructure with a government subsidy to EV consumers, namely the Model M, (b) EV manufacturer invests in setting up the charging infrastructure, namely the Model R (c) Government invests in setting up charging infrastructure and also provides a subsidy to EV consumers, namely the Model MG, and (d) Government invests in setting up the charging infrastructure, namely the Model G. Our findings show that the Model MG and M are equally effective for generating the maximum EV demand and market share, thereby require maximum effort for developing the charging infrastructure. Further, social welfare is also maximum in these two cases, which is counterintuitive because government support is more in the Model MG as compared to the Model M. Hence, under a limited budget constraint, the government can provide direct subsidy to EV consumers and let EV manufacturer invests in charging infrastructure to maximize social welfare. Further, the Model MG and M have a lower overall environmental impact when GV's environmental impact is higher than a threshold. Additionally, we provide multifaceted policy recommendations for the government, along with manufacturer strategic choices under different scenarios.

38 citations

Journal ArticleDOI
TL;DR: In this article , the authors aim to eliminate the research gap via a thorough investigation of the literature, including the effect of greenhouse gases emitted by the transportation industry on the environment, the impact of pollutants on transportation mode choice, a study of the obstacles to reducing pollution in transportation, and the presentation of solutions and suggestions.

33 citations

Journal ArticleDOI
01 Jul 2021-Energy
TL;DR: In this paper, the authors investigated the policy substitution influences for the production and pricing strategies, using Stackelberg game paradigms to model a two-stage auto supply chain.

30 citations

Journal ArticleDOI
TL;DR: In this article, a closed-loop supply chain consisting of an upstream supplier and a downstream manufacturer is analyzed using game-theoretic models, where process innovation can effectively improve remanufacturing performance while increasing the recovery rate of the manufacturer.
Abstract: The rapid development of green products, such as electric vehicle (EV) batteries, has brought about challenges in recycling and remanufacturing. To help tackle these challenges, in this research, we investigate how process innovation affects green product remanufacturing. Specifically, using game-theoretic models, we analyze process innovation strategies for green product remanufacturing in a closed-loop supply chain consisting of an upstream supplier and a downstream manufacturer. In these models, process innovation is implemented individually (i.e., non-cooperative mechanisms) by either the supplier or the manufacturer, or jointly (i.e., cooperative mechanism) by both firms. Our main findings are threefold. Firstly, process innovation can effectively improve remanufacturing performance while increasing the recovery rate of the manufacturer. Secondly, although the cooperative mechanism is always beneficial to the supplier, the supply chain and the environment, it may not be favourable by the manufacturer. Lastly, by extending the main models, we show that government subsidies can incentivise the manufacturer to adopt the cooperative mechanism, thereby achieving a win–win situation.

29 citations

Journal ArticleDOI
TL;DR: In this article, the authors investigated the optimal pricing strategies of domestic/imported electric vehicle manufacturer and the government's optimal decisions by developing the game-theoretic models and showed that the technology spillover caused by introducing IEVs into domestic markets can affect the profits of electric vehicle manufacturers and government's decisions on subsidies and tariffs.
Abstract: This paper investigates the optimal pricing strategies of domestic/imported electric vehicle manufacturer and the government’s optimal decisions by developing the game-theoretic models. The results show that the technology spillover caused by introducing IEVs into domestic markets can affect the profits of electric vehicle manufacturers and the government’s decisions on subsidies and tariffs. In addition, implementing the subsidy and tariff policies can help to improve the profit of the domestic electric vehicle manufacturer and the social welfare. Moreover, when the degree of technology spillover is relatively large, implementing the subsidy and tariff policies can also help to improve the consumer surplus.

29 citations

References
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Journal ArticleDOI

3,258 citations


Additional excerpts

  • ...Referring to the works of Mussa and Rosen (1978), Shao et al. (2017), with the given price of a GV (psmg Þ and an EV (psme Þ of the monopoly setting, in the presence of subsidy R and green-tax T, we can express the consumers’ utility functions in the following way: Ue ¼ 1þ dð Þh psme þ R (1) Ug ¼ h…...

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Journal ArticleDOI
TL;DR: In this paper, Arrow has demonstrated that when externalities are present in a general equilibrium system, a suitable expansion of the commodity space would lead to Pareto optimality by bringing externalities under the control of the price system.

1,721 citations


"A game-theoretic approach for elect..." refers background in this paper

  • ...…es, Kedad-Sidhoum, Penz, & Rapine, 2013; Benjaafar et al., 2013; He et al., 2017), tradable permits to regulate emissions (Liao, €Onal, & Chen, 2009; Montgomery, 1972), and decisions related to replacement of potentially hazardous substances (Kraft, Zheng, & Erhun, 2013) have also been studied…...

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01 Jan 2009

1,430 citations

Journal ArticleDOI
TL;DR: It is shown that firms could effectively reduce their carbon emissions without significantly increasing their costs by making only operational adjustments and by collaborating with other members of their supply chain.
Abstract: Using relatively simple and widely used models, we illustrate how carbon emission concerns could be integrated into operational decision-making with regard to procurement, production, and inventory management. We show how, by associating carbon emission parameters with various decision variables, traditional models can be modified to support decision-making that accounts for both cost and carbon footprint. We examine how the values of these parameters as well as the parameters of regulatory emission control policies affect cost and emissions. We use the models to study the extent to which carbon reduction requirements can be addressed by operational adjustments, as an alternative (or a supplement) to costly investments in carbon-reducing technologies. We also use the models to investigate the impact of collaboration among firms within the same supply chain on their costs and carbon emissions and study the incentives firms might have in seeking such cooperation. We provide a series of insights that highlight the impact of operational decisions on carbon emissions and the importance of operational models in evaluating the impact of different regulatory policies and in assessing the benefits of investments in more carbon efficient technologies. Note to Practitioners-Firms worldwide, responding to the threat of government legislation or to concerns raised by their own consumers or shareholders, are undertaking initiatives to reduce their carbon footprint. It is the conventional thinking that such initiatives will require either capital investments or a switch to more expensive sources of energy or input material. In this paper, we show that firms could effectively reduce their carbon emissions without significantly increasing their costs by making only operational adjustments and by collaborating with other members of their supply chain. We describe optimization models that can be used by firms to support operational decision making and supply chain collaboration, while taking into account carbon emissions. We analyze the effect of different emission regulations, including strict emission caps, taxes on emissions, cap-and-offset, and cap-and-trade, on supply chain management decisions. In particular, we show that the presence of emission regulation can significantly increase the value of supply chain collaboration.

1,007 citations


"A game-theoretic approach for elect..." refers background in this paper

  • ...Impact of regulations related to carbon emissions on production decisions (Absi, Dauz ere-P er es, Kedad-Sidhoum, Penz, & Rapine, 2013; Benjaafar et al., 2013; He et al., 2017), tradable permits to regulate emissions (Liao, €Onal, & Chen, 2009; Montgomery, 1972), and decisions related to…...

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Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between financial incentives, charging infrastructure, and local presence of production facilities to determine the relationship of one such policy instrument (consumer financial incentives) to electric vehicle adoption.

895 citations