A tripartite game analysis of industrial structure upgrading and green development of regional economy: A case study of Shanxi Province, China

In the contemporary context, both the upgrading of the industrial structure and the implementation of environmentally sustainable practices within the regional economy have emerged as central avenues for achieving quality development. This study examines the strategic behavior of local governments, capital, and people through the construction of a tripartite evolutionary game model. Subsequently, six different evolutionary stable strategy (ESS) are subjected to a comprehensive analysis. Finally, the parameters influencing the strategic decisions of each party are meticulously examined through simulation. The results of this study can be summarized as follows: First, it is shown that under appropriate conditions, all three entities support the scenario of stable development prospects associated with industrial structure upgrading (1, 1, 1). Second, the strategic choices made by capital and people depend on several factors, including existing profits, future benefits, and the costs associated with transformation. At the same time, local governments show a propensity to adopt incentive strategies. Ultimately, the research underscores the pronounced impact of future benefits, transformation costs, and the probability of success in industrial upgrading on all stakeholders, shaping their evolutionary trajectories and results. In particular, the probability of successful industrial structure upgrading exerts the greatest influence on evolutionary trajectories, while the possibility of government imposing carbon taxes and initial willingness primarily determine the evolutionary trajectory. This paper attempts to provide a new perspective on industrial structure upgrading and green development of the regional economy by combining evolutionary game theory and scenario analysis methods to promote the process of industrial structure upgrading and sustainable development.