Energy substitution game under the supply capacity restriction

Abstract

Along with Chinese economic growth, energy plays a more and more important role in the national economy. The imbalance between insufficient energy supply and huge energy demand has become a major problem in energy utilization, and energy substitution is attracting more and more attention as a key to the sustainable and sound development of Chinese economy. Explored the possibilities of the mutual substitution of the two types of energy with different functions with game theory in light of the supply capacity. As a conclusion, there are four equilibrium results corresponding to different levels of supply capacity. Subsequently, we carry on the study further by numerical simulation, investigate in one group of results most close to Chinese energy status and find the equilibrium price as well as the demand variation pattern.