Decisions on Pricing, Sustainability Effort, and Carbon Cap under Wholesale Price and Cost-Sharing Contracts

Rapid economic growth and industrialization have brought material abundance convenience, but also social environmental problems such as global warming, climate change, ozone depletion. For this reason, the public governments continued to make efforts reduce carbon oxide emissions worldwide over past few decades. To achieve mission, cap-and-trade regulations been introduced one of most effective market-based mechanisms control emissions. Accordingly, sustainability efforts, including development green products innovating manufacturing technologies, are being made by companies in supply chains their In context innovations emission constraints, article investigates pricing decisions, degree caps under two different chain contracts—in case, wholesale price contract cost-sharing contract. This establishes a Stackelberg game model each types presents equilibrium decisions players game. Major findings reveal that (i) performance is considerably affected presence cap; (ii) higher cap set government is, more innovation makes; (iii) can improve its profitability