Abstract
This paper develops a game-theoretic model to analyze the coordination between an energy distribution company (EDC) and a loyalty reward program (LRP) marketing firm for promoting household energy conservation. The partnership is characterized by a break-even LRP operator and a profit-driven EDC subject to a regulatory conservation target. We examine both non-cooperative Stackelberg games and a cooperative game. Our analysis yields several key insights. First, we find that a non-cooperative structure with the EDC as the leader can achieve system-wide profit equal to that of a fully cooperative scenario, providing a practical, implementable coordination mechanism. Second, the ratio of the perceived value to the redemption cost of reward points emerges as a pivotal contingency factor that determines the effectiveness of advertising spending and energy pricing strategies. Furthermore, reward points cannot fully overcome high household switching costs, and average energy savings show no significant impact on participation rates. These findings offer actionable guidance for designing efficient public-private partnerships in energy demand-side management and contribute to the literature on applying market-based incentives to pro-social behavioral change.
Keywords:
- Keyword: loyalty reward program; household energy conservation; public-private partnership; game theory; coordination
How to Cite:
Cao, Y., Zhao, X. & Ma, S., (2026) “Coordinating Promotion for Household Energy-Conservation”, Journal of Intelligent and Sustainable Systems (JISS) 2(2).