Differential Games of Supply Chain on Consideration of Low-Carbon Reference Effect under Different Carbon Quota Allocation Methods

Abstract

The carbon quota allocation method serves as the foundation for the design of the carbon trading mechanism, which has a significant impact on supply chain production decisions and the operational efficiency of the carbon trading market. To analyze the behavioral decision problem of supply chain members under different carbon quota allocation methods, the low-carbon reference effect is introduced to characterize the effect of consumers’ low-carbon preference on market demand. On this basis, three differential game models are constructed, namely, no emissions penalty, trading under the grandfathering principle, and trading under the benchmarking principle. The results indicate that the implementation of carbon trading policies enhances consumers’ low-carbon reference levels, the carbon emission reduction levels of manufacturers, and the low-carbon publicity levels of retailers. Moreover, the enhancement of the low-carbon reference effect becomes a positive driver of profit growth. Manufacturers are observed to make more efforts in carbon reduction under the benchmarking principle compared to the grandfathering principle. In contrast, the level of low-carbon publicity by retailers remains unchanged. The above findings can provide a scientific basis for the decision-making of emission reduction in low-carbon supply chain enterprises, which has certain theoretical significance.