Supply chain coordination optimization of retailer's equity holdings in manufacturer's carbon-reducing investment

Under the carbon trading policy and consumers' low carbon preference, aiming at the high cost cracking problem of low carbon products and the weaker robustness between supply chain enterprises, the vertical shareholding strategy among enterprises was introduced into the low carbon supply chain. The decision-making and coordination optimization strategy of supply chain enterprises were explored under the circumstances of retailer's shareholding in manufacturer's emission reduction investment. The results show that the vertical shareholding strategy enables supply chain enterprise profits to meet the incentive compatibility constraints while achieving a reduction in product carbon emissions. We also find that when carbon price rises, the emission reductions of clean manufacturers increase, while the emission reductions of dirty manufacturers decrease, and vice versa. Therefore, to increase the emission reduction of enterprises, the government can properly regulate carbon prices, namely, increasing clean manufacturers' carbon price and reducing dirty manufacturers' price. After implementing the equity strategy, dirty manufacturers have lower optimal decision-making and profits than clean manufacturers. Therefore, from the perspective of long-term development, dirty manufacturers should transform to clean ones. Under conditions that the manufacturer decides whether to reduce emissions and the retailer decides whether to hold shares, combined with the "discourse power" actually possessed by the supply chain enterprises, the Nash bargaining mechanism was used to achieve supply chain coordination. Finally, the numerical experiments were used to verify the relevant conclusions and analyze the impact of the simultaneous changes in carbon prices and shareholding ratios on supply chain decision-making. © 2021, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.