Section One: Introduction

1.1 Research Background & Practical + Theoretical Significance

Macro Background: The global transition to clean energy faces structural bottlenecks in intermittent renewable resources such as wind and solar power. Geothermal energy, originating from Earth’s core molten heat with a temperature equivalent to the solar surface, holds an ultra-abundant clean energy reserve capable of powering human society thousands of times over. Unlike volatile new energy sources, geothermal power delivers stable, round-the-clock zero-carbon output, making it a core strategic resource for long-term global carbon neutrality. Yet this theoretically unlimited clean energy has long remained underdeveloped and underutilized worldwide.
Practical Significance: From static game equilibrium logic, one-sided self-interested choices by governments, energy enterprises, and technology institutions have triggered long-term mutual loss results in geothermal energy development. Individual market participants tend to avoid high upfront exploration risks and long return cycles, leading to universal industry hesitation and collective inaction. This article applies behavioral economics and game theory to decode the irrational decision biases behind low geothermal penetration, providing actionable cooperative strategies for national energy policymakers, new energy enterprises, and cross-industry alliance builders.
Theoretical Significance: Existing energy economics research mostly focuses on technical efficiency, cost accounting, or policy incentive analysis, rarely explaining industrial development stagnation from the perspective of multi-subject interactive game decision-making. This study fills the theoretical gap by constructing a geothermal development cooperative game model, revealing how cognitive risk aversion and cross-industry trust deficits form systemic development barriers, and supplementing behavioral game theory application scenarios in the traditional clean energy industry.

1.2 Definition of Core Terms

Next-Generation Geothermal Energy: A universal clean energy system that extracts stable thermal energy from deep Earth core molten layers, featuring zero carbon emissions, uninterrupted power supply, and global deployable potential, distinct from shallow geothermal heating with limited output.
Energy Development Prisoner’s Dilemma: A behavioral game state where multiple stakeholders in geothermal development independently choose risk avoidance strategies out of self-interest, resulting in collectively suboptimal industry progress despite massive underlying resource potential.
Cross-Industry Unlikely Alliance: A targeted cooperative mechanism integrating non-traditional geothermal players (oil–gas technical teams, climate institutions, entrepreneurial organizations) to break original industrial resource and technical barriers, proposed as a core breakthrough for geothermal scaling.
Discussion Scope & Boundaries: This article focuses on multi-stakeholder behavioral decision-making and game interaction logic in global deep geothermal energy development. It excludes pure geothermal technical parameter deduction, geological structure research, and shallow geothermal application scenario analysis, centering only on behavioral economic barriers and cooperative optimization paths for industrial scaling.

1.3 Domestic & International Research Progress

Global geothermal energy research has gone through two key developmental stages. The first stage focuses on geological exploration and technical feasibility verification, confirming Earth’s core thermal reserve is sufficient to support global energy demand indefinitely. The second stage concentrates on cost reduction and policy incentive design, with IEA research predicting an 80% drop in next-generation geothermal costs by 2035 with effective industrial support. Mainstream academic viewpoints currently recognize technical feasibility and future cost advantages but cannot explain why global investment and project layout remain stagnant.
Current research shortcomings are prominent: most studies adopt a single-subject perspective, ignoring interactive game relationships between governments, enterprises, and research institutions. Traditional energy economics models assume fully rational decision-makers, failing to account for behavioral biases such as risk aversion, loss aversion, and short-term profit preference in actual market participants. No mature theoretical framework exists to interpret why abundant geothermal resources fall into long-term low-level development equilibrium, nor how cross-industry alliances can break this dilemma.

1.4 Article Framework & Core Research Goals

This article adopts a problem-solution structural logic. First, it sorts out typical behavioral game dilemmas in global geothermal development; second, it analyzes deep-rooted cognitive and institutional causes of irrational decision-making; third, it summarizes advanced cross-industry cooperative experience; finally, it proposes targeted game optimization strategies and guarantee mechanisms to achieve Pareto optimal equilibrium for the geothermal industry.
Core Research Question: What behavioral game dilemmas restrict the large-scale popularization of global deep geothermal energy, and how can cross-industry unlikely alliances break the long-term low-equilibrium development state?
Key Reader Takeaways: Master the prisoner’s dilemma logic in clean energy multi-party cooperation; identify common cognitive biases hindering long-term energy investment; grasp cross-industry alliance decision-making frameworks suitable for breaking industrial development bottlenecks; and learn actionable strategies for balancing risk and return in new energy layout.

Section Two: Main Body (Option D — Problem & Solution Articles)

2D.1 Full Overview of Main Industry and Academic Problems

Despite unprecedented resource advantages, global deep geothermal energy development faces three intertwined core dilemmas rooted in behavioral decision-making and multi-party game interaction. First, universal market risk avoidance leads to collective development stagnation. Deep geothermal exploration requires extremely high upfront capital investment, with uncertain drilling results and long profit cycles. From static game equilibrium logic, one-sided self-interested choices will trigger long-term mutual loss results, as every market participant chooses to wait and see rather than take the lead in investment.
Second, industrial resource barriers form closed-loop game solidification. Traditional geothermal development relies on single energy industry technical systems, lacking mature deep drilling and subsurface monitoring capabilities. Professional technical barriers prevent cross-industry resource integration, forming a zero-sum game where existing insiders occupy limited market resources while external high-tech teams cannot participate effectively.
Third, short-term profit bias suppresses long-term industrial layout. Most energy enterprises prioritize short-term investment returns and reject long-cycle, high-risk basic exploration projects. Behavioral economics confirms that decision-makers’ loss aversion bias makes them overestimate exploration failure risks and underestimate long-term industrial dividend potential, resulting in the whole industry falling into a low-level development equilibrium.

2D.2 Multi-Layered Root Cause Deep Analysis

Cognitive Level: Loss Aversion & Risk Overestimation Bias: Clean energy decision-makers exhibit typical behavioral bias differences from traditional industry decisions. For emerging geothermal projects with unproven large-scale commercialization experience, participants’ psychological sensitivity to failure losses far exceeds their expectation of future benefits. This asymmetric risk perception leads most institutions to abandon positive investment strategies and adopt passive waiting strategies, forming a typical prisoner’s dilemma in group decision-making.
Game Level: Absence of Cooperative Incentive Mechanisms: Current global geothermal development lacks unified benefit-sharing and risk-sharing rules. When individual enterprises invest independently, they bear all exploration risks alone, while successful resource exploration will produce industry-wide spillover benefits. This asymmetric risk–return game structure makes active investors suffer net losses while free riders gain excess benefits, further discouraging proactive industrial investment behavior.
Institutional Level: Fragmented Industrial Boundaries: The oil–gas industry has mature deep drilling and subsurface detection technologies that perfectly match geothermal development demands, yet long-term industrial segmentation forms institutional barriers. Traditional energy industry game logic emphasizes internal resource monopoly rather than cross-industry value co-creation, resulting in high-quality technical resources being idle while the geothermal industry faces technical bottlenecks.

2D.3 Reference Mature Advanced Industry and Academic Practices

The core breakthrough experience for global emerging clean energy scaling lies in breaking single-industry game boundaries and building cross-subject cooperative alliances. The Geothermal Entrepreneurship Organization’s practical exploration provides a mature industry reference: it integrates climate activists, oil–gas technical experts, entrepreneurial institutions, and university research teams to build an “unlikely alliance” beyond traditional energy industry boundaries.
Different from traditional closed industrial cooperation, this open alliance model breaks the zero-sum game of internal resource competition. It leverages mature drilling engineering experience from the oil–gas industry to reduce geothermal exploration technical risks, uses university scientific research platforms to optimize thermal energy extraction efficiency, and relies on climate institution resources to obtain policy and public support. From dynamic game evolution logic, this multi-subject alliance transforms the original one-sided risk-taking game into a multi-party risk-sharing and benefit-sharing repeated game, fundamentally solving the free-rider problem in industrial development.

2D.4 Specific, Actionable Targeted Improvement Suggestions

Build Cross-Industry Unlikely Alliance Mechanisms: Break traditional energy industry segmentation, actively integrate oil–gas technical resources, university geoscience research teams, climate governance institutions, and entrepreneurial operation platforms. Define clear technical division of labor, resource sharing rules, and achievement conversion paths for all parties to realize complementary advantages. Oil–gas teams undertake deep drilling and subsurface monitoring work; universities complete thermal resource mapping and technical optimization; entrepreneurial institutions promote commercial operation and market promotion.
Establish Risk-Sharing and Benefit-Sharing Game Rules: Change the traditional single-party risk-bearing model. Set up industrial exploration risk funds jointly funded by governments, enterprises, and social capital to disperse upfront investment risks. Formulate tiered benefit distribution mechanisms based on investment ratio and technical contribution, eliminate free-rider behavioral incentives, and make active investment and technical participation the dominant optimal strategy for multi-party game equilibrium.
Optimize Long-Term Incentive Policies to Correct Short-Term Behavioral Bias: Governments should introduce long-cycle tax incentives, land support, and grid connection priority policies for geothermal projects, offsetting enterprises’ short-term profit pressure. Guide decision-makers to shift from short-term loss aversion thinking to long-term value investment thinking, correcting the behavioral bias of overestimating risks and underestimating long-term industrial dividends.

2D.5 Supporting Guarantee Measures for Real Implementation

Institutional Guarantee: Establish Special Cross-Industry Coordination Institutions: Set up dedicated geothermal alliance coordination departments to unify technical standards, resource scheduling, and benefit supervision mechanisms, avoiding conflicts of interest and inefficient resource allocation in multi-party cooperation.
Technical Guarantee: Build Open Industrial Technical Sharing Platforms: Open geothermal resource exploration data, drilling technical parameters, and project operation experience to all alliance members, form iterative technical optimization mechanisms, and continuously reduce industrial exploration and development costs.
Supervision Guarantee: Improve Cooperative Performance Evaluation Systems: Establish multi-dimensional evaluation indicators covering technical contribution, capital investment, and resource output, link evaluation results with benefit distribution, ensure fair cooperation among all subjects, and maintain the long-term stability of cooperative game equilibrium.

Section Three: Application & Real-World Implications

3.1 Real Applicable Scenarios Across Different Industries and Learner Groups

National Energy Policy Departments: Apply the cooperative game framework to formulate national geothermal energy industrial plans, design risk-sharing policy tools, and break departmental and industrial segmentation barriers to promote cross-field resource integration. For small and medium-sized energy economies with insufficient single-industry technical capacity, cross-industry alliance strategies can rapidly make up for technical and capital shortcomings and accelerate clean energy transformation.
New Energy Enterprises and Investment Institutions: Use behavioral economics risk-bias analysis methods to optimize project investment decision-making, avoid blind wait-and-see caused by loss aversion, and actively participate in industrial cooperative alliances to reduce individual investment risks. Large energy enterprises can take the lead in building alliance platforms to realize long-term industrial layout; small and micro enterprises can join mature alliances to obtain technical and resource dividends.
Climate Research and Academic Institutions: Take the cross-industry unlikely alliance model as a typical case of clean energy cooperative governance, summarize replicable multi-party cooperation mechanisms, and provide theoretical support for global zero-carbon energy scaling. This model is also applicable to the technological breakthrough and industrialization promotion of other high-risk, long-cycle emerging clean energy sources.

3.2 Widespread Misunderstandings and Effective Avoidance Methods

Misunderstanding One: Geothermal development barriers are purely technical problems. Many practitioners attribute slow industrial progress solely to insufficient drilling and extraction technologies. In fact, from game equilibrium logic, the core barrier is irrational multi-party decision-making and defective cooperative mechanisms. Even with mature technologies, lack of risk-sharing rules will still lead to collective investment stagnation. The correct approach is to match technical breakthroughs with institutional and game rule optimization.
Misunderstanding Two: Industrial cooperation must rely on homogeneous industry participants. Traditional energy cooperation mostly aggregates homogeneous enterprises within the industry, ignoring the value of cross-industry unlikely alliances. Behavioral economics shows that heterogeneous subject cooperation can break inherent industrial game solidification, bring disruptive technical and model innovations, and is more suitable for emerging industries in bottleneck breakthrough stages.
Misunderstanding Three: Long-cycle energy investment is not worth layout. Decision-makers easily fall into short-term profit bias and ignore geothermal’s ultra-long-term stable dividend advantage. Practitioners need to establish long-term game thinking, recognize that early risk investment will form long-term industrial competitive barriers, and avoid abandoning high-value strategic layout due to short-term losses.

3.3 Practical Takeaways for Students and Industry Practitioners

Mindset Transformation: Shift from single-subject technical thinking to multi-party game cooperative thinking. When analyzing industrial development bottlenecks, do not only focus on technical and superficial economic factors but deeply explore hidden behavioral biases and interactive game dilemmas behind group decisions.
Actionable Recommendations: In emerging industry investment and project cooperation, actively build or join heterogeneous cooperative alliances, use multi-party risk-sharing mechanisms to offset individual behavioral biases, and break the prisoner’s dilemma of collective inaction. Prioritize optimizing cooperative rules and benefit distribution mechanisms before technical investment to ensure long-term stable equilibrium of cooperation.
Long-Term Development Guidance: Future clean energy competition will no longer be single-enterprise technical competition but alliance-based ecological competition. Practitioners should take cross-industry cooperative game theory as a core decision tool to lay out long-term strategic resources and form sustainable competitive advantages in industrial transformation.

Section Four: Summary & Future Outlook

4.1 Concise Core Conclusion Recap

Global deep geothermal energy possesses unparalleled clean energy potential, yet its large-scale development is restricted by typical behavioral game dilemmas. Market participants’ loss aversion and short-term profit bias trigger collective wait-and-see behavior, while the absence of cross-industry cooperation mechanisms exacerbates industrial development stagnation. Building heterogeneous unlikely alliances and optimizing multi-party risk-benefit game rules can effectively break the low-equilibrium development state. Institutional, technical, and supervisory guarantee measures ensure the long-term stability of cooperative game equilibrium, realizing Pareto optimal development of the geothermal industry.

4.2 Future Industry & Academic Research Trends

Future Development Directions: With the continuous improvement of cross-industry alliance mechanisms and the gradual reduction of technical costs, global geothermal energy will become a core base load power source for zero-carbon energy systems. Multi-party cooperative game models will be widely applied in emerging clean energy fields to solve universal industrial bottleneck problems.
Emerging New Challenges: As industrial scale expands, differences in interest demands among heterogeneous alliance subjects will increase, bringing new game conflicts in benefit distribution and resource scheduling. In addition, global regional differences in policy environments and technical foundations will increase the difficulty of unified cooperative mechanism promotion.
Valuable Follow-Up Research Areas: Quantitative modeling of geothermal multi-party cooperative game equilibrium, regional differentiated alliance cooperation mechanism design, and behavioral intervention strategies for energy enterprise long-term investment bias correction are key directions for subsequent academic and industrial research.

Section Five: References

1. TEDConferences. (2021, August). The untapped energy source that could power the planet. https://www.ted.com/talks/jamie_c_beard_the_untapped_energy_source_that_could_power_the_planet
2. International Energy Agency. (2026). The Future of Geothermal Energy. https://www.iea.org/reports/the-future-of-geothermal-energy/executive-summary
3. Geothermal Entrepreneurship Organization. University of Texas at Austin. Global Geothermal Cross-Industry Cooperation Practice Report.
4. IRENA. (2023). Global Geothermal Market and Technology Assessment. https://allianceforindustrydecarbonisation.org/-/media/Files/IRENA/Agency/Publication/2023/Feb/IRENA_Global_geothermal_market_technology_assessment_2023.pdf
5. Carnegie Endowment for International Peace. (2025). Unlocking Global Geothermal Energy: Pathways to Scaling International Deployment.
Consistent rational long-term game thinking and cross-party cooperative awareness are essential to unlock the full potential of global clean energy resources and achieve sustainable industrial evolution.