Abstract
Fairness concern behavior is extremely common in social life, and many scholars are beginning to pay attention to this behavior. In this study, we investigate a two-echelon construction supply chain that consists of a general contractor and a subcontractor under cap-and-trade policy. We study the carbon emission reduction decisions and profit distribution mechanism in the construction supply chain with fairness concern and cap-and-trade. We use the Nash bargaining model to describe the fairness concerns of the construction supply chain members and use the co-opetition model to portray the profit distribution. We show that the fairness concern can impose an adverse influence on firms’ profits and decrease the magnitude of their carbon emission reductions. The subcontractor’s fairness concern causes greater losses to the construction supply chain’s profit. We further demonstrate the impact of fairness concern on the optimal decisions of the general contractor and the subcontractor through numerical analysis.
Highlights
In recent years, global warming has become increasingly serious and environmental problems such as rising sea levels and frequent extreme weather caused by climate change have become increasingly prominent
Jiang et al (2019) focused on the two-level construction supply chain composed of the general contractor (GC) and the SC and constructed the profit distribution model of the construction supply chain under cap-and-trade policy and obtained the optimal profit distribution ratio and the level of carbon emission reduction efforts for both parties[30], this study considered three cases: the pure competition, the co-opetition and the pure cooperation, compared the optimal decisions in three cases
This study investigates carbon emission reduction and a profit distribution mechanism for a construction supply chain consisting of a GC and SC
Summary
Global warming has become increasingly serious and environmental problems such as rising sea levels and frequent extreme weather caused by climate change have become increasingly prominent. With the promotion of this policy, construction supply chain parties face many challenges These parties are independent economic entities and determine their own level of carbon emission reduction efforts with the goal of maximizing their own profits. With the implementation of the cap-and-trade policy, firms must determine their own emission reduction efforts and how to distribute benefits between construction supply chain parties under complex decision constraints (capacity, capital and policy). Many studies (Fehr and Schmidt(1999)[11]; Liu(2018)[12]; Du(2018)[13]; Pu(2019) [14]) have found that many supply chain parties (such as the general contractor and the subcontractor) exhibit fairness concern in practice. Under cap-and-trade policy, how can construction supply chain firms make carbon emission reduction decisions considering the fairness concern?. Under cap-and-trade policy, how can profit be distributed among the construction supply chain firms considering the fairness concern so as to maximize the total profit of the construction supply chain?
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