Incentive Contract Research On The Transmission Of Low Carbon Preference To Low Carbon Product Innovation Under Pricing Power Difference

Since the signing of the Paris Agreement,China has promoted the implementation of a two-carbon policy to deal with climate change.Under this environment,it is necessary for manufacturing industry,which are the main source of greenhouse gas emissions,to conserve energy and reduce emissions,and to produce more low-carbon and environmentally friendly products under the joint efforts of the upstream and downstream of the supply chains.The spillovers of product income caused by consumers’ low-carbon preference is a non-negligible driving force to promote enterprises’ low-carbon product innovation.However,this dynamic transmission is often not smooth in the supply chain emission reduction,which is largely caused by the pricing power dispute between the upstream and downstream of the supply chain,the uneven division of interests,and also reduces the efficiency of supply chain.Therefore,this paper focuses on the transmission incentive of low-carbon product innovation in the supply chain under the pricing power difference.Based on the perspective of pricing power difference and considering the low carbon preference of consumers,this paper analyzes and discusses the incentive contract research on the innovation transmission of low carbon products in the supply chain.First of all,This paper introduces important literature and related concepts such as consumer low-carbon preference,low-carbon product innovation,supply chain pricing power and supply chain benefit coordination,and then conducts modeling analysis on the supply chain low-carbon product innovation considering consumer low-carbon preference.In the case of poor transmission of low-carbon product innovation incentive in the supply chain,Two incentive contracts are introduced to optimize supply chain emission reduction incentive.Finally,the modeling conclusions and corresponding policy implications are drawn.Using modeling methods,parties in the game between supply chains,the dynamic transmission of low-carbon product innovation incentive is often not smooth,and presents heterogeneity with pricing power differences:When manufacturers have pricing power,the interest game inhibits the dynamic transmission of product innovation by inhibiting the quantitative effect and output level of the impact of low-carbon product innovation on profits;When the distributor has the pricing right,the interest game inhibits the power transmission by inhibiting the output level and price level of the influence of low-carbon product innovation impetus on profits.Both cases are accompanied by supply chain profit loss,and the former has a stronger effect on inhibiting dynamic transmission.When the manufacturer has pricing power,when the low carbon preference is weak,the revenue-sharing contract can improve the low-carbon product innovation;when the low carbon preference is strong,the cost-sharing contract can improve the low-carbon product innovation impetus,and both achieve pareto improvement.When the distributor has pricing power,there is no solution to contracts,because the spillover of product innovation income realized through the contract will be crowded out by the distributor through pricing power,and the manufacturer’s profit cannot be improved.Limiting the pricing power of distributors is the key to achieve the incentive contract of low-carbon product innovation.This paper finally obtains the coordination result provide useful policy implications for optimizing low-carbon product innovation from the perspective of supply chain.