<p>Incentive incompatibility sometimes necessitates external governmental intervention to promote the adoption of green technologies, while the interplay between stricter environmental standards and Voluntary Adoption Level (VAL) further complicates firms’ adoption and timing decisions. To address these challenges, this study develops a three-period game model to examine how regulatory constraints and market drivers jointly influence firms’ green technology adoption and leader choices. The results reveal that firms’ adoption decisions are risk- and cost-orientated, and sensitivity analyses indicate that the leader and follower face asymmetric substitution patterns between regulatory and market drivers. Regarding timing choice, our results reveal what we term the “solitary leader dilemma”, where leadership does not necessarily guarantee higher profitability when no follower emerges. In extended analyses, we validate the effectiveness of VAL-based regulation through comparative evaluation. Additionally, by incorporating heterogeneous firms, government objectives, and demand uncertainty, we confirm the robustness of the main model. These findings provide managerial guidance for firms’ green technology adoption strategies and offer policy insights for the design of effective environmental regulation.</p>