Preservation technology investment and carbon abatement strategies in a supplier-retailer cold chain based on a differential game

Abstract

Against the background of a low-carbon economy and the rising environmental awareness, extensive attention has been paid to carbon emissions in the cold chain in academic research and practice. In cold chain operations, consumers’ preference for freshness is also growing, which motivates the investment in preservation technology to improve the freshness of perishable products. However, further investment in preservation technology also increases carbon emissions. Considering these idiosyncratic features in cold chains, we apply a differential game model to examine cold chain members’ preservation technology investment and carbon abatement behaviors from a long-term horizon and dynamic perspective. The equilibrium strategies of the cold chain were analyzed and compared under four different scenarios, numerical experiments were implemented to verify the theoretical results, and a sensitivity analysis was performed to identify further insights. The results indicate that the trajectory of the supplier’s preservation technology level is monotonic and that the trajectory of the carbon abatement level changes direction no more than once. Furthermore, when the demand for perishable products is less sensitive to environmental friendliness, an increasing preference for freshness is more conducive to improving cold chain profits, but when the demand for perishable products is more sensitive to environmental friendliness, increasing the preference for freshness does not improve such profits. The cost coefficient of the carbon abatement effort has a more obvious impact on the demand and economic profits of a cold chain. An improved bilateral cost-sharing contract is more effective than a unilateral cost-sharing contract, as the former can simultaneously improve the cold chain’s economic and environmental benefits and achieve perfect coordination. Overall, our research provides a theoretical basis for the long-term optimization and coordination of cold chains in low-carbon environments.