Optimal Strategies in a Manufacturer-Led Supply Chain Under Hybrid Carbon Policies and Retailer’s Fairness Concerns

Ping Li, Shuxuan Ai and Yangmei Zeng ()
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Ping Li: School of Economics and Management, Hubei University of Technology, No. 28, Nanli Road, Hongshan District, Wuhan 430068, China
Shuxuan Ai: School of Economics and Management, Hubei University of Technology, No. 28, Nanli Road, Hongshan District, Wuhan 430068, China
Yangmei Zeng: School of Economics and Management, Hubei University of Technology, No. 28, Nanli Road, Hongshan District, Wuhan 430068, China

Sustainability, 2025, vol. 17, issue 14, 1-23

Abstract: Implementing hybrid carbon policies is crucial for supply chains’ low-carbon transition. However, the downstream retailer is often passive in low-carbon strategies, leading to fair issues that may influence the decision-making of channel members. Therefore, this study integrates green technology, remanufacturing, retailer’s fairness concerns, low-carbon preference, and hybrid carbon policies into a manufacturer-led supply chain through differential game theory. Then, the equilibrium solutions for each member are analyzed under the centralized case and decentralized case involving a cost-sharing contract for low-carbon promotion. Our results show that centralized decision-making can optimize both the economic and environmental performances of channel members; retailer’s fairness concerns can enhance low-carbon promotional efforts and the cost-sharing ratio for such initiatives, but do not impact low-carbon production efforts. Additionally, a threshold exists on the relationship between retailer’s fairness concerns and the cost-sharing ratio; increased low-carbon preference motivates more efforts in low-carbon production and promotion. Moreover, stricter carbon policies motivate the manufacturer to increase low-carbon efforts, but the retailer tailors its low-carbon promotional strategy according to the unit carbon emissions of products to maintain an adequate level of low-carbon goodwill.

Keywords: hybrid carbon policies; fairness concerns; manufacturer-led; differential game; cost-sharing contract; threshold (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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