RETRACTED: Green investment mechanism considering supply chain risk aversion and negotiating power

Abstract

• Offer to implement optimal decision in relation to green investment. • Two types of cost-sharing contract is considered. • Supply chain risk aversion is negatively related to green investment. In this paper, we study the green investment decision question in a rice supply chain composed of supply chain risk aversion (SCRA) planting firms and supply chain risk-neutral (SCRN) sellers. Under centralized and decentralized decision-making, we consider the two types of cost-sharing contract (CSC) namely the general (CSC) and the CSC considering the bargaining power. We study the influence of SCRA and construct the green investment optimization model for the rice supply chain. Our study shows that the green investment level in the decentralized rice supply chain is negatively correlated with the SCRA, while the SCRA is positively correlated with the green investment level regardless of the type of CSC. By comparing the two CSCs, we find that both contracts not only improve the expected utility of the rice supply chain but also enhance the green investment level of the rice supply chain. Under the bargaining game, the SCRA is positively correlated with the green investment level and cost-sharing ratio. On the other hand, the bargaining power is also positively correlated with the green investment level and cost-sharing ratio. Under certain conditions, the green investment level of the rice supply chain can be lower than that of the decentralized supply chain. Considering rice planting firms' SCRA and negotiation power, the bargaining CSC is the best under certain conditions.