Evolutionary game theoretic analysis on low-carbon strategy for supply chain enterprises

The focus of this research is evolutionary low-carbon supply chain enterprise behavior and the strategic issues associated with government low-carbon policies and the emerging low-carbon market. A two level supply chain consisting of a retailer and a manufacturer is established. A Stackelberg game approach employed to solve four retailer and manufacturer low-carbon strategy combinations, after which these strategies are further analyzed using an evolutionary theoretical game approach, from which an evolutionary stability strategy (ESS) is determined. The ESS indicated that: 1) in the low-carbon technology development stage, only one player (the manufacturer or the retailer) should employ low carbon behavior; and 2) in the advanced low-carbon technology stage, only the retailer should employ low-carbon behavior. These positive results achieved economic, environmental and social Pareto improvements that complied with the government low-carbon requirements, catered to the low-carbon consumer demand, and improved supply chain economic and environmental performances. Finally, the impact of the changes from the government low-carbon policies, consumer sensitivities, and retailer carbon financing interest/subsidy rates on the ESS were analyzed, from which it was found: 1) the government could encourage enterprises to reduce carbon emissions by controlling carbon prices rather than imposing a carbon cap; 2) the enterprises need to focus on consumer sensitivities as the increase of these will reduce the long-term operational carbon emissions; and 3) retailers could stabilize the evolutionary supply chain system by lowering the carbon financing interest rate. (C) 2019 Published by Elsevier Ltd.