Joint Decision-Making and the Coordination of a Sustainable Supply Chain in the Context of Carbon Tax Regulation and Fairness Concerns

Zhi Liu, Xiao-Xue Zheng, Ben-Gang Gong and Yun-Miao Gui
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Zhi Liu: College of Management Engineering, Anhui Polytechnic University, Wuhu 241000, China
Xiao-Xue Zheng: College of Transportation and Civil Engineering, Fujian Agriculture and Forestry University, Fuzhou 350002, China
Ben-Gang Gong: College of Management Engineering, Anhui Polytechnic University, Wuhu 241000, China
Yun-Miao Gui: College of Management Engineering, Anhui Polytechnic University, Wuhu 241000, China

IJERPH, 2017, vol. 14, issue 12, 1-20

Abstract: Carbon tax regulation and consumers’ low-carbon preference act as incentives for firms to abate emissions. Manufacturers can improve product sustainability and retailers can strengthen the promotion of low-carbon products as part of such abatement. Current incomplete rationality also affects product sustainability and low-carbon promotion level. In this context, we consider a supply chain with a manufacturer and a retailer and investigate the impacts of the manufacturer’s and the retailer’s fairness concerns on their production sustainability level, low-carbon promotion level and profitability. We also explore the coordination contract. The results show that the manufacturer’s and the retailer’s fairness concerns decrease their product sustainability and low-carbon promotion level, together with the profits of the system and the manufacturer. With regard to the retailer’s fairness concern, the product sustainability level and the manufacturer’s profit are lower; moreover, the low-carbon promotion level and the profits of the supply chain and the retailer are higher. A revenue-sharing contract can coordinate the supply chain perfectly; however, members’ fairness concerns increase the difficulty of coordination. Finally, the numerical results reveal that carbon tax regulation can encourage the manufacturer to enhance the product sustainability level. Further, the impacts on the low-carbon promotion level and firms’ profitability are related to the cost coefficients of product sustainability.

Keywords: sustainable supply chain; carbon tax; fairness concern; sustainability level; low-carbon promotion (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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