Low-carbonization game analysis and optimization in a two-echelon supply chain under the carbon-tax policy

Abstract

Purpose

The purpose of this study is to help governments make carbon-tax policy and help enterprises make decisions under that policy.

Design/methodology/approach

Based on the carbon-tax policy, with the consideration of consumers’ low-carbon preferences, this paper compares the pricing, emission reduction and advertising decisions in three different games (one centralized game and two decentralized Stackelberg games).

Findings

This paper concludes that, through centralized game, namely, cooperation game, manufacturers, retailers and consumers can reach their optimal situation. In the numerical simulation, this paper analyzes the impact of carbon-tax rate to the decisions of manufacturer and retailer, as well as their profit.

Originality/value

Using the Nash Bargaining Model, the introduction of the bargaining power and the degree of risk aversion of the parties, this study provides some solution for the distribution of the additional profit when they cooperate, in which way they can reach their Pareto optimality.

Citation

Yang, S. and Yu, J. (2016), "Low-carbonization game analysis and optimization in a two-echelon supply chain under the carbon-tax policy", Journal of Chinese Economic and Foreign Trade Studies, Vol. 9 No. 2, pp. 113-130. https://doi.org/10.1108/JCEFTS-11-2015-0029