Decision and Coordination of Low-Carbon E-Commerce Supply Chain with Government Carbon Subsidies and Fairness Concerns

Abstract

More low-carbon products help fight climate change and environmental problems. Governments consider encouraging the manufacturer’s initiative of producing low-carbon products by providing subsidies. However, when the manufacturer sells low-carbon products through the e-commerce platform, fairness concerns arise because of the profit difference. So, this paper builds game models to study decision behavior in the low-carbon e-commerce supply chain when the manufacturer receives government carbon subsidies and has fairness concerns. Our findings show that consumers’ preference for low-carbon products will be conducive to the operation of the supply chain. So it is necessary to popularize low-carbon products. The effect of government subsidies on supply chain decisions is different from fairness concerns. Government subsidies are positive factors in the supply chain operation, which can stimulate the manufacturer to make low-carbon products as expected and choose the high quality-high price development mode. This will help improve the profit of enterprises in the supply chain but cannot effectively stimulate the e-commerce platform to increase its service level. By contrast, the manufacturer’s fairness concerns are negative factors, which make the manufacturer prefer to adopt a low quality-low price development mode to improve their utility. This offsets the positive effect of government subsidies. It turns out that the profit of both node enterprises and the supply chain system has declined. But, fairness concerns are an important way to express the manufacturer’s demand. Finally, the joint allocation contract of cost and profit designed by comprehensively considering the effect of government subsidies and fairness concerns can make the supply chain coordinated. However, even as positive factors, only within a specific range do government subsidies help coordinate the supply chain, but not the more, the better.