Differential game theoretic analysis of the blockchain technology investment and carbon reduction strategy in digital supply chain with government intervention

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In the context of a low-carbon environment and the prevalence design digital supply chain (DSC), the interaction between digital and green has received much attention in supply chain low-carbon practices and academic research. The rising consumer environmental awareness (CEA) and transparency perception (CTP) of green product information have stimulated investments in blockchain technology and green production. However, the improved digital operation level resulting from blockchain technology investment further reduces carbon emissions. Considering these emerging features of DSC, the differential game is employed to investigate blockchain technology investment and green production investment strategies of DSC members from a long-run and dynamic standpoint. This study analyzes and compares DSC equilibrium strategies under four different scenarios. Theoretical results are verified through numerical experiments, and sensitivity analysis is conducted to unlock further insights. The results demonstrate that the digital operation level follows a monotonic trajectory, while the carbon reduction level exhibits no more than one change over time. In addition, CEA stimulates investment in green production and blockchain technology simultaneously. Both CEA and CTP improve the digital operation level, carbon reduction level and overall profit of the DSC. The improved synergic mechanism with bilateral participation is most effective in improving the economic efficiency and environmental benefit of the DSC. The economic advantage of the bilateral synergic mechanism over other mechanisms can be enhanced as CEA and CTP rise. The cost factor of blockchain technology investment and the manufacturer’s marginal benefit more significantly affect the demand and profit of green product. This study offers a solid theoretical foundation for the long-run operation and synergy of DSC in sustainable development.