IJERPH, Vol. 15, Pages 1985: Competition among Supply Chains and Governmental Policy: Considering Consumers’ Low-Carbon Preference

IJERPH, Vol. 15, Pages 1985: Competition among Supply Chains and Governmental Policy: Considering Consumers’ Low-Carbon Preference

International Journal of Environmental Research and Public Health doi: 10.3390/ijerph15091985

Authors: Xujin Pu Zhiping Song Guanghua Han

Many manufacturers and retailers have cooperated for low-carbon production in various industries. This study examines the role of consumers’ low-carbon preference in this cooperation. We construct four scenarios to investigate the effects of consumers’ low-carbon preference on the market equilibrium of supply chains’ product selection strategy. Based on the game theoretic models, optimal solutions for the two supply chains are derived with different consumers’ preference for low-carbon products. Through the discussion, we uncovered the influence of consumers’ preference on price and demand and the relationship between the influence coefficient of retailers’ promotional effort on consumers’ utility and retailer profits. In addition, given the increase of government’s low-carbon production subsidy, two supply chains will both more likely choose low-carbon production. Interestingly, under the government subsidy, the profit of manufacturer will increase or decrease more than its retailer and the market structure will not change if the two supply chains have chosen low-carbon production.

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