Game theoretic analysis of prices and low-carbon strategy considering dual-fairness concerns and different competitive behaviours

Abstract

The issues of rationality and fairness in channel profit distribution have gradually attracted the attention of channel members. In this paper, considering a manufacturer concerned with distributional fairness and two competitive retailers, where one is a fairness-neutral retailer and the other retailer is concerned with peer-induced fairness, prices and carbon emission reduction (CER) decisions are explored in a two-echelon supply chain. Four models are established for different behaviours and dual-fairness, and the optimal decisions are obtained. Furthermore, the impacts of the coefficient of CER, competition coefficient and dual-fairness concern factors are examined. The results show that Cournot competition is more beneficial for the CER level and utility of the manufacturer, while Stackelberg competition is more conducive to increasing the retailers' prices and utilities. Regardless of the type of pattern that the retailers play, the distributional fairness concern of the manufacturer has a negative impact on the CER level but has a positive effect on wholesale and retail prices, while peer-induced fairness increases the CER level and reduces wholesale and retail prices.