Research on pricing decision-making for low-carbon supply chain considering risk aversion under carbon trading

Carbon emission rights trading promotes corporate carbon emission reduction by market means, and is an important economic lever for controlling greenhouse gas emissions, responding to climate change and improving resource utilization efficiency. Under the background of carbon trading, manufacturing enterprises often show risk aversion characteristics due to investment in emission reduction technologies. In order to encourage manufacturing enterprises to actively reduce emissions and ensure the benefits of each member, how to conduct reasonable pricing and emission reduction investment has become the focus of commodity pricing decision in supply chain. With the goal of realizing the low-carbon sustainable development of the supply chain, based on carbon trading policies and emissions-sensitive needs, a two-tier low-carbon supply chain was designed including retailers selling low-carbon products and manufacturers investing in emission reduction technologies. The pricing decision-making process of supply chain members under the manufacturer’s risk-averse behavior was analyzed by using mean-variance method and Stackelberg game theory, and a supply chain product pricing decision-making model under different decision-making scenarios was built. The research results show that: in order to avoid the risks arising from investment in emission reduction technologies, manufacturers have adopted a strategy of reducing wholesale prices and emission reduction rates, which sacrifices part of their own profits and increases their opponents’ profits. On the other hand, if consumers have a high preference for low-carbon products, the risk-averse behavior of manufacturers will lead to lower product sales prices than in the centralized decision-making situation, and compared with the risk-neutral distribution decision, the profit of the supply chain system at this time is further reduced. The research results provide a reference for the emission reduction decision of manufacturing enterprises under the carbon trading policy. © 2023, Central South University Press. All rights reserved.