Dynamic reward and penalty strategies of green building construction incentive: an evolutionary game theory-based analysis

Abstract

Green building incentives are widely adopted in the world to promote green building construction. However, the incentives from the government are usually predetermined, which cannot obtain a stable effect in green construction practice. To better promote green building construction, this paper studies dynamic government's reward and penalty evolution during the construction process. Based on the prospect theory, the decision of government reward and penalty is formulated as evolutionary game model under four different scenarios: static reward and static penalty, dynamic reward and static penalty, static reward and dynamic penalty, and dynamic reward and dynamic penalty. Through theoretical analysis, our results revealed that the dynamic reward and static penalty is the best strategy to promote green building construction. More specifically, if the intensity of subsidy and penalty increases, contractors tend to green construction; while the probability of active supervision by government is inversely proportional to subsidy and positively proportional to penalty. This study can provide a useful insight for the policy makers to formulate effective reward and penalty policy, thereby standardizing the behavior of contractors, and reducing the negative impact of the construction industry on the environment.

Keywords: Evolutionary game; Green building construction; Dynamic reward and penalty; Prospect theory.