Research on supply chain carbon emission reduction decisions based on fairness concerns and revenue sharing contracts

This paper aims to investigate the impacts of manufacturer and retailer fairness concerns and revenue-sharing contracts on supply chain pricing and carbon emission reduction decisions. A conventional two-stage supply chain model is developed using Stackelberg game and Nash bargaining theories. Through backward induction, the model derives the optimal wholesale price, retail price, and carbon emission reduction level under three distinct scenarios: no fairness concerns, manufacturer fairness concerns, and retailer fairness concerns. The model further examines the effects of carbon emission permit prices, revenue-sharing ratios, and the intensity of fairness concerns on these optimal decisions. Numerical simulations demonstrate that retailer fairness concerns are more effective than no concerns or manufacturer concerns in enhancing the carbon emission reduction level. The reduction level increases with higher carbon permit prices and revenue-sharing ratios but decreases with the intensity of manufacturer fairness concerns. A U-shaped relationship is identified between the reduction level and the intensity of retailer fairness concerns. Under a revenue-sharing contract, retailer fairness concerns pressure the manufacturer to lower the wholesale price, motivating the manufacturer to improve the carbon reduction level to stimulate product demand. These findings confirm the positive influence of supply chain members’ psychological behaviors on carbon emission reduction. This study provides valuable scientific insights for policymakers seeking to leverage internal behavioral dynamics within supply chains to optimize carbon regulatory strategies, thereby balancing economic and environmental benefits.