Automotive Engineering Commons^™

Myopic Versus Farsighted Behaviors In A Low-Carbon Supply Chain With Reference Emission Effects, Jun Wang, Xianxue Cheng, Xinyu Wang, Hongtao Yang, Shuhua Zhang

Mathematical Sciences Faculty Research

The increased carbon emissions cause relatively climate deterioration and attract more attention of governments, consumers, and enterprises to the low-carbon manufacturing. This paper considers a dynamic supply chain, which is composed of a manufacturer and a retailer, in the presence of the cap-and-trade regulation and the consumers’ reference emission effects. To investigate the manufacturer’s behavior choice and its impacts on the emission reduction and pricing strategies together with the profits of both the channel members, we develop a Stackelberg differential game model in which the manufacturer acts in both myopic and farsighted manners. By comparing the equilibrium strategies, it can …