The production and platform competition with the reselling mode in the carbon neutral era

Xiaoping Xu, Yuting Wang and Guowei Dou ()
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Xiaoping Xu: Anhui University
Yuting Wang: Anhui University
Guowei Dou: Research Institute of Business Analytics and Supply Chain Management, Shenzhen University

Annals of Operations Research, 2025, vol. 347, issue 3, No 19, 1699-1732

Abstract: Abstract Given the significance of achieving sustainable development goals (SDGs), carbon emission plays a crucial role in realizing sustainability. Our paper investigates the topic from the perspective of regional carbon emission control. We build analytical models for two supply chain structures, which are composed of one manufacturer and one retailer (Case 1), and two manufacturers and one retailer (Case 2), to explore the joint impact of the region-cap and competition on the optimal decisions of supply chains consisting of manufacturer(s) and platform(s). Platform power is considered to reflect the platform’s ability to enlarge the market share. Interestingly, we find that (i) the optimal production quantities in Case 2 may decrease with the region-cap; and (ii) the manufacturers’ optimal profits in Cases 1 and 2 firstly decrease and then increase with the region-cap. In Case 2, low-carbon products can be promoted and the manufacturer’s profit can be enhanced with the low region-cap. By comparing the two cases, we find that introducing a new manufacturer producing low-carbon products always damages the incumbent’s production and profit. Also, we show that with fiercer competition, the total carbon emission gets decreases when a competitive manufacturer joins the supply chain. In the extension, we incorporate platform competition (Case 3) in the supply chain and find that the government’s reduction in the region-cap can help expand the market size of low-carbon products in some situations. Besides, the optimal production quantities in Case 1 and Case 2 always increase with the platform power, while the optimal production quantities may move in the opposite direction in Case 3. In addition, we provide guidance for governments, platforms, and manufacturers to take effective measures in achieving the SDGs, providing them with a scientific basis for decision-making, and promoting the transformation of sustainable development concepts into practical operations in controlling regional carbon emission.

Keywords: Cap-and-trade regulation; Region-cap; Platform; Competition; Reselling mode (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10479-024-06124-z

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