scholarly journals Pricing Strategy and Carbon Emission Abatement under Cap-and-Trade Regulation Considering Social Learning

2019 ◽  
Vol 2019 ◽  
pp. 1-17 ◽  
Author(s):  
Bin Chen ◽  
Man Yu
Keyword(s):  
Social Learning ◽  
Carbon Emission ◽  
Pricing Strategy ◽  
High Price ◽  
Low Carbon ◽  
Cap And Trade ◽  
Carbon Product ◽  
Trade Regulation ◽  
Emission Abatement ◽  
Period 2

In an uncertainty market, social learning plays a significant role in obtaining information to make better decisions. Under cap-and-trade regulation, this paper aims to investigate firms’ pricing and carbon emission abatement issues considering the impact of social learning. This paper establishes a two-period model in a market consisting of a manufacturer and heterogeneous consumers. The manufacturer produces two alternatives (ordinary product and low-carbon product) and makes decisions on sales prices and carbon emission abatement levels. Consumers make decisions on whether and which product to buy. Consumers are not sure about their valuations of products and have the opportunity to discover their true valuation by social learning. The results show that the emission abatement level on ordinary product is affected by the pricing strategy for both types of products. However, the emission abatement level on low-carbon product is only affected by its own pricing strategy. It also shows that social learning lowers the emission abatement level on ordinary product, whereas it improves the emission abatement level on low-carbon product when charging a high price for low-carbon product. Moreover, the price of ordinary product in period 1 is no less than that in period 2. In contrast, the price of low-carbon product in period 2 is higher than that in period 1.

scholarly journals Information Sharing in a Supply Chain under Cap-and-Trade Regulation

2018 ◽  
Vol 2018 ◽  
pp. 1-18 ◽  
Author(s):  
Man Yu ◽  
Tuo Li
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Carbon Emission ◽  
Wholesale Price ◽  
Cap And Trade ◽  
High Demand ◽  
Bilateral Monopoly ◽  
Trade Regulation ◽  
Emission Abatement ◽  
Demand Information

Under cap-and-trade regulation, this paper investigates information sharing issues in supply chains with different structures. Adopting a game-theoretic method, we start the analysis from a simple bilateral monopoly supply chain with a manufacturer and a retailer. The model is then extended to a scenario with two competing retailers. The manufacturer provides the wholesale price and invests in carbon emission abatement level. The retailers order products to meet consumers' demand in an uncertain market. One retailer has the power to obtain private information. The results show that the wholesale price and the carbon emission abatement level respond positively to the demand signal. We find that the well-informed retailer is better off with low-demand information sharing and worse off with high-demand information sharing in a bilateral monopoly supply chain. However, the well-informed retailer can benefit from high-demand information sharing in a competitive environment. We also find that the uninformed retailer may get hurt from information sharing under certain conditions. Moreover, the manufacturer's expected profit is related to the capability of abating carbon emissions, the information accuracy, and the demand uncertainty.

scholarly journals A Flexible Cap-and-Trade Policy and Limited Demand Information Effects on a Sustainable Supply Chain

2021 ◽  
Vol 13 (19) ◽  
pp. 10746
Author(s):  
Ying Gao ◽  
Jianteng Xu ◽  
Huixin Xu
Keyword(s):  
Trade Policy ◽  
Carbon Emission ◽  
Stackelberg Game ◽  
The Other ◽  
Limited Information ◽  
Low Carbon ◽  
Cap And Trade ◽  
Distribution Free ◽  
Demand Information ◽  
Limited Demand

Carbon emission reduction is increasingly becoming a public consensus, with governments formulating carbon emission policies, enterprises investing in emission abatement equipment, and consumers having a low-carbon preference. On the other hand, it is difficult for industry managers to obtain all the demand information. Based on this, this paper aims to investigate operations and coordination for a sustainable system with a flexible cap-and-trade policy and limited demand information. Newsvendor and distribution-free newsvendor models are formulated to show the validity of limited information. Stackelberg game is exploited to derive optimal abatement and order quantity solutions under centralized and decentralized systems. The revenue-sharing and two-part tariff contracts are then proposed to coordinate the decentralized system with limited demand information. Numerical analyses complement the theoretical results. We list some major findings. Firstly, we discover that using abatement equipment can effectively reduce emissions and increase profits. Secondly, the distribution-free approach is effective and acceptable for a system where only mean and variance information is informed. Thirdly, the mean parameter has a greater impact on profits and emissions comparing with the other seven parameters. Finally, we show that both contracts may achieve perfect coordination, and the two-part tariff contract is more robust.

scholarly journals Optimal Pricing, Ordering, and Coordination for Prefabricated Building Supply Chain with Power Structure and Flexible Cap-and-Trade

Mathematics ◽  
2021 ◽  
Vol 9 (19) ◽  
pp. 2426
Author(s):  
Wen Jiang ◽  
Menglin Liu ◽  
Lu Gan ◽  
Chong Wang
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Power Structure ◽  
Supply Chain Performance ◽  
Low Carbon ◽  
Cap And Trade ◽  
Power Structures ◽  
Carbon Emission Reduction ◽  
Prefabricated Building

Under the increasing pressure of global emission reduction, prefabricated buildings are becoming more and more popular. As prefabricated building manufacturers and assemblers are emerging in the market, how do they make decisions of pricing, ordering, and emission reduction? In this paper, game theory is used to make the decisions for the prefabricated building supply chain with flexible cap-and-trade and different power structures, i.e., using prefabricated building manufacturers as the leader, using the vertical Nash equilibrium, and using prefabricated building assemblers as the leader. The two-part tariff contract is designed to coordinate the supply chain and to improve the supply chain performance. Moreover, we discuss the influence of different power structures and the two-part tariff contract on the optimal decisions and profits. Finally, numerical analysis is used to verify the conclusions. This indicates that the supply chain leaders will gain a higher profit and that the power structure has a significant influence on the two-part tariff contract, which will result in an unfair distribution of profit. High carbon trading prices benefit carbon emission reduction. Consumer low-carbon awareness has a positive effect on carbon emission reduction and supply chain performance.

Strategic information sharing and competition under cap-and-trade regulation

2019 ◽  
Vol 119 (3) ◽  
pp. 639-655 ◽  
Author(s):  
Man Yu ◽  
Erbao Cao
Keyword(s):  
Information Sharing ◽  
Carbon Emissions ◽  
Carbon Emission ◽  
Demand Uncertainty ◽  
Partial Information ◽  
Wholesale Price ◽  
Public Information ◽  
Cap And Trade ◽  
Content Type ◽  
Trade Regulation

PurposeThe purpose of this paper is to investigate whether truthful information sharing can be achieved via informal cheap talk in a competitive setting, and how carbon emission constraint and information-sharing modes (no information sharing, partial information sharing and public information sharing) interact with each other under cap-and-trade regulation.Design/methodology/approachThis paper establishes an emission-dependent supply chain consisting of a manufacturer, an incumbent retailer who has superior demand information and a new entrant retailer. The manufacturer abates carbon emissions under the pressures of government environmental regulation and consumers’ eco-friendly concern. The research formulates a multistage game to explore every party’s decision and the implications of information-sharing modes.FindingsThe results show that truthful information sharing can be achieved when the manufacturer decides both the wholesale price and carbon emission abatement. The results also show that the incumbent retailer’s information-sharing decision highly depends on the manufacturer’s capacity in abating carbon emissions and the demand uncertainty.Originality/valueThe research adds value to information management and sustainable production literature. This work emphasizes the interaction between the information flow and material flow. Not only it investigates the factors that affect information-sharing modes from a new point of view when considering carbon emission constraint, but also provides operational strategies for manufacturers to make more profit when facing asymmetric information and emission regulation.

Stackelberg game based co-firing biomass with coal under carbon cap-and-trade regulation

2021 ◽  
pp. 0958305X2110415
Author(s):  
Zongtang Xie ◽  
Hongxia Liu
Keyword(s):  
Emission Reduction ◽  
Power Plants ◽  
Carbon Emission ◽  
Stackelberg Game ◽  
Cap And Trade ◽  
Carbon Emission Reduction ◽  
Trade Regulation ◽  
Social Welfare Maximization ◽  
Emission Quota ◽  
Interactive Algorithm

Coal-fired power industry is under enormous pressure to accomplish carbon emission reduction targets. This paper proposes a bi-level multi-objective model for co-firing biomass with coal under carbon cap-and-trade regulation which considers a leader-follower Stackelberg game between the authority and the coal-fired power plants. The upper level regards social welfare maximization and allocation satisfaction maximization as its multiple objectives, while the lower level attempts to maximize the profits of each coal-fired power plant. The inherent uncertainty prompts the motivation for employing fuzzy set theory to characterize the uncertain parameters and determine their exact values. A case study from Shandong Province, China is provided to demonstrate the practicality and efficiency of the optimization model. [Formula: see text]-constraint method and interactive algorithm are used to solve the model, and furthermore the solutions associated with different free carbon emission quota levels and minimal allocation satisfactions have been generated to examine the influences. Based on the analysis and discussion, the methodology can meet the carbon emission reduction goals and transit to a lower-carbon power generation. It also assists the decision makers to develop desired quota allocation strategy in accordance with their attitudes and actual conditions.

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