Incentive Strategies for Low-Carbon Supply Chains with Asymmetric Information of Carbon Reduction Efficiency

Qinpeng Wang and Longfei He
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Qinpeng Wang: School of Management Science and Engineering, Hebei University of Economics and Business, Shijiazhuang 050061, China
Longfei He: College of Management and Economics, Tianjin University, Tianjin 300072, China

IJERPH, 2018, vol. 15, issue 12, 1-18

Abstract: Information concerning carbon reduction efficiency is of great significance to supply chain operations. Considering the impact of information asymmetry on the performance of low-carbon supply chain, we therefore analyze a chain system with a single product designer and a single manufacturer. The manufacturer owns information on carbon reduction efficiency, whereas the product designer only knows that the carbon reduction efficiency of the manufacturer is either high or low. To induce the manufacturer to reveal his true private information of carbon-reduction efficiency to the product designer, we devise the pooling and separating equilibrium models to compare the impacts of these two models on supply chain performance, respectively. We find that the high-efficiency manufacturer gets his first-best choice at the equilibrium decision in the separating model, and obtains the information rent in the pooling model. The information rent increases in the efficiency difference between the two emission-reduction types. Additionally, we examine how the probability of the high (or low)-efficiency manufacturer being chosen impacts on both the profits of chain members and carbon-reduction levels. The research provides a reference for companies about how to cooperate with partner who possess private information of carbon emissions.

Keywords: low-carbon supply chain; information asymmetry; pooling equilibrium; separating equilibrium; sustainability (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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