Behavior Analysis for Government and Enterprise in Home-Appliance Replacement

Home-appliance replacement may be implemented in two situations: with and without the financial subsidy offered by the government. As the implement entity of the home-appliance replacement, the enterprise may have two choices: with and without the replacement. In this paper, we analyzed the behaviors of the government and the enterprise based on a mixed-strategy game by system dynamics methodology. According to the simulation of the long term behavior, all of the enterprises will chose to carry out the replacement no matter with or without financial subsidy if they can obtain profit from the replacement; all of the enterprises will chose to give up the replacement even though with financial subsidy if they can´t obtain profit from the replacement. It means that the government can choose to stop offering financial subsidy if the enterprise can obtain profit from the replacement.