Dynamic strategies of horizontal low-carbon supply chains under double carbon policies: A bounded rationality perspective

Abstract

Under double carbon policies, this study proposes a horizontal low-carbon supply chain involving a traditional manufacturer and a low-carbon manufacturer. On this basis, we develop two scenarios, which differ in whether the traditional manufacturer adopts green technology or not. Considering bounded rationality, we explore the dynamic production and emission reduction strategies in the two scenarios by using game theory and chaos theory. The results show that manufacturers’ adjustment speeds have great effects on equilibrium strategies, with chaos and other complex phenomena emerging in certain cases. For both manufacturers, the increase of the emission reduction adjustment speed shrinks stable regions of their production strategies, and an excessive adjustment strategy always harms its own profit but brings benefits to the competitor. By comparing the results of the two scenarios, the conditions for the traditional manufacturer to adopt green technology can be concluded as a relatively low unit emission reduction cost and a suitable low-carbon competitive intensity. When these conditions are satisfied, the production, emission reduction, and profit of the low-carbon manufacturer will all decrease. Finally, we provide useful guidance in promoting low-carbon development.