Research On The Dynamic Investment Decision In Low Carbon Supply Chain Based On Time-Inconsistent Preference

The use of fossil energy has made great contributions to the global economy,but also brought about a series of problems such as climate,macro-economy and health.To effectively control the concentration of greenhouse gases in the atmosphere and develop low carbon economy,governments and industries all over the world are actively exploring ways to save energy and reduce emissions.More and more enterprises join in the practice of energy conservation and emission reduction,regard low-carbon environmental protection as their brand strategy and corporate values,to create low carbon supply chain.According to behavioral and psychological experiments,decision makers generally have time-inconsistent preference.It is more theoretical and practical to analyze dynamic investment decisions of low-carbon supply chain based on time-inconsistent preference.First,this paper analyzes and combs the basic theory of utility discounting model,as well as the development of utility discounting model,then focuses on the hyperbolic discounting model which is applicable to mature decision makers.According to classic consumption,savings and investment portfolio model suggested by Merton,we put forward the HJB equation for mature decision makers of the dynamic investment decision,which lays the foundation for following research on supply chain's carbon emission reduction investment decisions.Next,analyze the investment decision characteristics of carbon emission reduction in supply chain.To consider the carbon emission reduction activities of the supply chain under the dynamic framework,we build a dynamic programming model for inter temporal decision making of supply chain enterprises with time-inconsistent preference,and analyze the effect of time-inconsistent preference on the decision of carbon emission reduction investment and expected utility.In the centralized decision,the system aims at maximizing cooperative utility to cut emission reduction;in the decentralized decision,according to the Stackelberg differential game model of which the manufacturer acts as leader and the retailer acts as follower,members of the supply chain aim to achieve the goal to maximize their own utility.By solving the problem,results show that in both cases the manufacturer and the retailer's investment decisions for carbon emission reduction are independent of time-inconsistent preference,as well as the proportion the manufacturer shares retailer's investment forcarbon emission reduction,while the expected utility in both cases is relevant to time-inconsistent preference;the stronger the time-inconsistent preference,the smaller the expected utility.Based on time-inconsistent preference,this paper analyzes the dynamic investment decision of low carbon supply chain.The main innovations are:(1)putting forward the HJB equation for the mature decision maker to reduce carbon emission under the dynamic framework,and extending the decision-maker's utility function from exponential function to linear function;(2)under uncertain demand,building dynamic programming model of inter temporal decision based on time-inconsistent preference,and analyzing the optimal investment decision for carbon emission reduction.