Exploring Low-Carbon Strategy Adoption in Manufacturing: An Evolutionary Game Theory Perspective on Government Oversight and Rent-Seeking by Third-Party Testing Organizations

Yuguo Jiang; Chenglong Wang; Enock Mintah Ampaw; Nana Zhang; Xin Liao

Abstract

Low-carbon transition in manufacturing has been widely studied using two-party game models. However, the strategic interactions among governments, enterprises, and third-party testing organizations (TTOs), particularly under rent-seeking risks, remain underexplored. To address this gap, this study developed a tripartite evolutionary game model that incorporates bounded rationality and strategic interdependence. In detail, the study analyzed the dynamic decision-making processes of these three actors under low-carbon objectives, focusing on rent-seeking behavior and its systemic implications. By using replicator dynamics and Jacobian matrix-based stability analysis, the study identified the asymptotic stability conditions for equilibrium strategies and validated them through numerical simulations. After correcting the payoff matrix and replicator dynamics, the re-derived Jacobian analysis shows that no pure-strategy equilibrium satisfies all negative eigenvalues; hence, the system exhibits no pure evolutionarily stable strategy (ESS). Instead, numerical simulations reveal that the system converges to different stable states depending on initial conditions and parameter combinations. Key findings of the study reveal that: (1) enterprises’ adoption of low-carbon production is influenced not only by government oversight but also by the cost differential between low- and non-low-carbon options; (2) governments’ active regulation is driven by both the likelihood of corporate compliance and the penalties imposed on non-compliant TTOs; and (3) TTOs’ refusal of rent-seeking is negatively associated with rent-seeking costs but positively correlated with forgery expenses and penalties. Moreover, the initial strategy probabilities of TTOs significantly shape the evolutionary trajectory of the entire system. The theoretical contribution of this study centers on the integration of rent-seeking dynamics into a tripartite evolutionary game framework. This demonstrates how collusion risks fundamentally reshape strategic interactions among governments, enterprises, and third-party verifiers. In effect, this will provide a theoretical basis for designing robust regulatory and anti-collusion mechanisms for carbon emission verification.

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