Evaluation of price fluctuation risks in tradable green certificate market based on complex social network approach

The intention of tradable green certificate (TGC) system is to leverage the market's price discovery function of renewable energy's environmental value. However, the government is concerned about excessive price fluctuation risks, which could reduce renewable energy investment willingness. Since the complex social network among TGC market entities affects information dissemination, it has significant impacts on price fluctuation. Thus, this paper simulates the evolution of complex social network based on entities' game strategies to examine the impacts of complex social network structure on price fluctuation risks. The study finds that (1) the game learning mechanism promotes the continuous evolution of complex social network toward an equilibrium state, increasing the network's clustering by four times, and ultimately forming several clusters around influential manufacturers (central nodes). (2) In the short term, the cluster structure of social network suppresses the widespread dissemination of information, causing price to continue their historical trend, which reveals momentum effect. As entities' interaction level increases to 130% of the initial state, TGC price returns to fundamental value. (3) In the long term, the degree of central nodes is 5 to 10 times that of other nodes; hence, other entities tend to excessively imitate the decisions of central nodes, leading to an overreaction in the market, causing high-frequency price fluctuations and resulting in reversal effect.