The Optimal Decisions for a Sustainable Supply Chain with Carbon Information Asymmetry under Cap-and-Trade

In this paper, we firstly investigate issues of low carbon supply chain including one retailer and one manufacturer in the context of joint information asymmetry and cap-and-trade mechanism, where the retailer is a leader and faces a stochastic demand, and the manufacturer is a follower and keeps private information in carbon emissions. Our aim is to design an incentive contract to make the manufacturer disclose the carbon information. Furthermore, we quantify the effects of the carbon price, the carbon emissions and the carbon quota on the supply chain model and design an incentive contract for improving supply chain performance. Finally, we give a couple of numerical examples and undertake sensitivity analysis to illustrate the proposed model and provide some managerial inferences in the conclusions