How to invest decarbonization technology in shipping operations? Evidence from a game-theoretic investigation

Decarbonization technologies help reduce carbon emissions in shipping operations. Whether to invest in related technologies for green operations is a critical decision of port operations, especially under the cap-and-trade scheme. Understanding how such a scheme shapes the way bounded rational stakeholders with heterogeneous risk attitudes manage their decarbonization technology investment is crucial. Drawing on mental account theory, this study incorporates operation and carbon asset accounts into a Stackelberg game model to investigate shipping operations' decarbonization technology investment strategies. The findings show that there is always at least one participant who invests. The port operator prefers to invest alone so that the equilibrium pulls them from a prisoner's dilemma to a Pareto optimal result, in which both receive their largest benefits. Moreover, a carbon asset account is more valuable than an operation account in determining decarbonization technology investment decisions. The port operator needs to pay attention to the price of carbon emission allowances. In contrast, the shipping company must consider the consignor's sensitivity to low carbon level, which significantly influences carbon emissions. This study recommends actions for improving the sustainable development of the shipping industry.