Differential decision of low-carbon supply chain based on market preferences with fairness concerns

Abstract

<p style='text-indent:20px;'>Under the dual background of energy economy and environmental protection, expanding the optimal decision-making of the low-carbon supply chain is significant to the energy manufacturing industry. This paper discusses the impact of low-carbon preference, price elasticity, and low-carbon research and development investment (LR & DI) on equilibrium decisions of a three-echelon supply chain system under the scenarios of market segments and fairness concerns. Firstly, it is found that the optimal price and yield are positively correlated with the counterparty's demand elasticity coefficient and sensitivity coefficient, and the supply chain profit is better under the decentralized decision of the retailer's fairness concerns. Secondly, there is a positive correlation between each member's interests and the degree of the manufacturer's fairness concern. While considering the retailer, the manufacturer is responsible for the supply chain income loss. Finally, because the optimal pricing and yield are positively correlated with consumers' low-carbon preference and LR & DI, manufacturers may optimize profits by raising LR & DI within a tolerable range. In addition, it is verified that the Stackelberg game optimizes the traditional model by a numerical example, providing theoretical support for decision-making in different scenarios.</p>