Competition among Supply Chains and Governmental Policy: Considering Consumers’ Low-Carbon Preference

Xujin Pu, Zhiping Song and Guanghua Han
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Xujin Pu: School of Business, Jiangnan University, Wuxi 214122, China
Zhiping Song: School of Business, Jiangnan University, Wuxi 214122, China
Guanghua Han: School of International and Public Affairs, Shanghai Jiao Tong University, Shanghai 200030, China

IJERPH, 2018, vol. 15, issue 9, 1-21

Abstract: 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.

Keywords: low-carbon production; consumers’ preference; cooperation; supply chain competition (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 (5)

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