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The Optimal Decisions for a Sustainable Supply Chain with Carbon Information Asymmetry under Cap-and-Trade

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  • Baiyun Yuan

    (Research Center of Energy Economy, School of Business Administration, Henan Polytechnic University, Jiaozuo 454000, China)

  • Bingmei Gu

    (Research Center of Energy Economy, School of Business Administration, Henan Polytechnic University, Jiaozuo 454000, China)

  • Jin Guo

    (Research Center of Energy Economy, School of Business Administration, Henan Polytechnic University, Jiaozuo 454000, China)

  • Liangjie Xia

    (School of Business, Tianjin University of Finance and Economics, Tianjin 300222, China)

  • Chunming Xu

    (Department of Mathematics, College of Science, Tianjin University of Technology, Tianjin 300384, China)

Abstract

In this paper, we firstly investigate issues of low carbon supply chain including one retailer and one manufacturer in the context of joint information asymmetry and cap-and-trade mechanism, where the retailer is a leader and faces a stochastic demand, and the manufacturer is a follower and keeps private information in carbon emissions. Our aim is to design an incentive contract to make the manufacturer disclose the carbon information. Furthermore, we quantify the effects of the carbon price, the carbon emissions and the carbon quota on the supply chain model and design an incentive contract for improving supply chain performance. Finally, we give a couple of numerical examples and undertake sensitivity analysis to illustrate the proposed model and provide some managerial inferences in the conclusions.

Suggested Citation

  • Baiyun Yuan & Bingmei Gu & Jin Guo & Liangjie Xia & Chunming Xu, 2018. "The Optimal Decisions for a Sustainable Supply Chain with Carbon Information Asymmetry under Cap-and-Trade," Sustainability, MDPI, vol. 10(4), pages 1-17, March.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:4:p:1002-:d:138521
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    References listed on IDEAS

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    6. Zi‐rui Chen & Pu‐yan Nie, 2020. "Implications of a cap‐and‐trade system for emission reductions under an asymmetric duopoly," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3135-3145, December.
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