Evolutionary Game Behavior of Stakeholders in Existing Building EMC Based on Prospect Theory and Policy Incentives

Energy Management Contracting (EMC) is important for scaling energy-saving retrofits in existing buildings, yet policy incentives often fail when stakeholders perceive costs, benefits, and enforcement risks differently. This study aims to examine how subjective cognitive biases affect strategic interactions among governments, energy service companies (ESCOs), and energy-consuming units (ECUs) in China’s existing-building EMC market. Prospect theory is introduced into a tripartite evolutionary game model, and replicator dynamics with MATLAB R2024a simulations are used to analyze policy incentives, regulatory constraints, and behavioral parameters. The simulation results show that, among conventional policy parameters, moderate incentives and bilateral penalties are more effective than simply increasing subsidies or imposing unilateral punishment; when regulatory costs exceed a sustainable range, active supervision becomes unstable and cooperative implementation is weakened. Among prospect-theory parameters, higher loss aversion increases the perceived burden of fiscal and regulatory costs, while lower probability weighting reduces the perceived certainty of inspection and punishment. Reducing γ from 0.69 to 0.4 substantially weakens deterrence, and increasing λ from 1.5 to 2.25 intensifies strategic fluctuations. These findings provide a behavioral basis for designing staged EMC governance policies and offer practical implications for improving the stability and effectiveness of existing-building EMC implementation.