Optimal Strategies in a Manufacturer-Led Supply Chain Under Hybrid Carbon Policies and Retailer’s Fairness Concerns

Implementing hybrid carbon policies is crucial for supply chains’ low-carbon transition. However, the downstream retailer is often passive in low-carbon strategies, leading to fair issues that may influence the decision-making of channel members. Therefore, this study integrates green technology, remanufacturing, retailer’s fairness concerns, low-carbon preference, and hybrid carbon policies into a manufacturer-led supply chain through differential game theory. Then, the equilibrium solutions for each member are analyzed under the centralized case and decentralized case involving a cost-sharing contract for low-carbon promotion. Our results show that centralized decision-making can optimize both the economic and environmental performances of channel members; retailer’s fairness concerns can enhance low-carbon promotional efforts and the cost-sharing ratio for such initiatives, but do not impact low-carbon production efforts. Additionally, a threshold exists on the relationship between retailer’s fairness concerns and the cost-sharing ratio; increased low-carbon preference motivates more efforts in low-carbon production and promotion. Moreover, stricter carbon policies motivate the manufacturer to increase low-carbon efforts, but the retailer tailors its low-carbon promotional strategy according to the unit carbon emissions of products to maintain an adequate level of low-carbon goodwill.