Decision and coordination in the dual-channel supply chain considering cap-and-trade regulation

Under cap-and-trade regulation, this paper investigates the decision and coordination in the dual channel supply chain arising out of low-carbon preference and channel substitution. From the game theoretical perspective, we develop the decision-making models of the centralized and decentralized supply chain, which consist of one manufacturer and one retailer. We design an improved revenue sharing contract to effectively coordinate the manufacturer and retailer. The results suggestthe government make cap-and-trade regulation to reduce carbon emission efficiently andrealize coordinated development betweenthe economy and environment. In addition, the supply chaincan obtain greater profits based on the consumer's low-carbon preference. Meanwhile, the improved revenue-sharing contract leads to a Paretoimprovement of the efficiency between the manufacturer and retailer, as well as the optimal profits are related to bargaining powers. (C) 2018 Elsevier Ltd. All rights reserved.