A game analysis on the application of low carbon technology (LCT) in the supply chain

There is growing consensus that business will ultimately have to meet customer needs. In this regard, use of low carbon tech for carbon emission within the whole supply chain has gained attention in recent years. This study proposes a game-theoretic approach to model and analyze the process of utilizing low carbon tech (LCT) considering three players: the supplier, the producer with LCT and the retailer in the end market. We characterize the Nash equilibrium of the sequential game and discuss its features. A special attention is devoted to the analysis of the impact of incentives and market chasm on the equilibrium, in which the low carbon product with LCT and the traditional one may have the utility for the customer.