Evolutionary game theoretical approach for reducing carbon emissions in a complex supply chain organization

Purpose Our research explores the intricate behavior of low-carbon supply chain organizations in an ever-evolving landscape, emphasizing the profound implications of government-mandated low-carbon policies and the growing low-carbon market. Central to our exploration is applying a combined game theory model, merging Evolutionary Game Theory (EGT) with the Shapley Value Cooperative Game Theory Approach (SVCGTA). Design/methodology/approach We establish a two-tier supply chain featuring retailers and manufacturers within this novel framework. We leverage an integrated approach, combining strategic Evolutionary Game Theory and Cooperative Game Theory, to conduct an in-depth analysis of four distinct low-carbon strategy combinations for retailers and manufacturers. Findings The implications of our findings transcend theoretical boundaries and resonate with a trinity of economic, environmental and societal interests. Our research goes beyond theoretical constructs to consider real-world impacts, including the influence of changes in government low-carbon policies, the dynamics of consumer sensitivities and the strategic calibration of retailer carbon financing incentives and subsidies on the identified ESS. Notably, our work highlights that governments can effectively incentivize organizations to reduce carbon emissions by adopting a more flexible approach, such as regulating carbon prices, rather than imposing rigid carbon caps. Originality/value Our comprehensive analysis reveals the emergence of an Evolutionary Stability Strategy (ESS) that evolves in sync with the phases of low-carbon technology development. During the initial stages, our research suggests that manufacturers or retailers adopt low-carbon behavior as the optimal approach.