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Low Carbon Strategy Analysis of Competing Supply Chains with Different Power Structures

Bin Liu (), Tao Li () and Sang-Bing Tsai ()
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Bin Liu: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Tao Li: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China
Sang-Bing Tsai: School of Economics and Management, Shanghai Maritime University, Shanghai 201306, China

Sustainability, 2017, vol. 9, issue 5, 1-21

Abstract: This paper investigates the emission reduction performance for supply chain members in both single-channel and exclusive dual-channel cases. Two game scenarios (Manufacturer Stackelberg and Retailer Stackelberg) are examined under different channel structures. Furthermore, we introduce government subsidies as an impact factor of low-carbon strategy adoption. In the single-channel (Case 1), we mainly examine the influence of consumers’ price-sensitivity on channel members’ optimal decisions. In the dual-channel (Case 2), we focus on the joint impact of product substitutability and different channel power structures on the optimal decisions under asymmetric related channel status. The analysis suggests that the Stackelberg leaders always perform better than their corresponding followers before emission reduction, while they may not necessarily yield more benefits after emission reduction. The implementation of low-carbon strategy depends on parameters like product substitutability and channel base demand. Finally, all the supply chain members will encounter a Prisoner’s Dilemma when the product substitutability is relatively high.

Keywords: low-carbon strategy; dual channel; Stackelberg game; product substitutability; asymmetric channel status; analysis methods (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2017
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