Evolutionary game of environmental investment under national environmental regulation in China

With the rapid development of social economy, the deterioration of environment has become more and more serious; it is urgent to find a balance between economic development and environmental protection. Therefore, enterprises are appealed to invest in environmental protection, and local municipalities are appealed to supervise the environmental behaviors of enterprises, while central government plays a role of regulation. In order to study the preconditions for a better environmental strategy combination of local municipalities and enterprises, an evolutionary game theory was first constructed in this paper, then the evolutionary stable strategy (ESS) of local municipalities and enterprises under different scenarios was examined, and finally a simulation was used to test the results of the analysis. The results indicate that central government's regulation has influence on the strategies chosen by local municipalities and enterprises, the larger the degree of central government's incentives are, the more possible local municipalities and enterprises would choose environment-friendly strategies; and the intensity of central government's regulation, the cost and benefits of local municipalities' supervision, and the cost and benefits of enterprises' environmental investment are the key influence factors.