Evolutionary game analysis of low‐carbon effort decisions in the supply chain considering fairness concerns

Abstract

As global environmental problems are becoming more severe, how to efficiently reduce carbon emissions has become an urgent problem to be solved. Manufacturers and retailers can effectively reduce carbon emissions through low‐carbon efforts, and doing so is important for the sustainable development of low‐carbon supply chains. This paper develops a general framework that considers how bounded rationality and fairness concerns affect the manufacturer's and retailer's low‐carbon effort decisions and discusses the evolutionary stable strategy (ESS) and the evolution process of the manufacturer's and retailer's low‐carbon efforts. The ESS shows that the manufacturer and the retailer will increase their low‐carbon efforts when the initial unit profit is higher. Otherwise, a smaller initial unit profit will reduce their low‐carbon efforts. This paper also analyzes different attributes of fairness concerns and finds that advantageous fairness concerns increase low‐carbon efforts, whereas disadvantageous fairness concerns reduce low‐carbon efforts. In addition, fairness concerns will speed up the manufacturer's and retailer's low‐carbon efforts to ESSs. When the manufacturer and retailer choose the “no effort” strategy, they will stop investing quickly, but when they choose the “effort” strategy, they will not invest quickly. This paper can provide decision support for using the low‐carbon effort investment strategy by supply chain members.