Decision and coordination in the dual-channel supply chain considering cap-and-trade regulation

Under cap-and-trade regulation, this paper investigates the decision and coordination in the dual-channel supply chain arising out of low-carbon preference and channel substitution. From the game theoretical perspective, we develop the decision-making models of the centralized and decentralized supply chain, which consist of one manufacturer and one retailer. We design an improved revenue-sharing contract to effectively coordinate the manufacturer and retailer. The results suggestthe government make cap-and-trade regulation to reduce carbon emission efficiently andrealize coordinated development betweenthe economy and environment. In addition, the supply chaincan obtain greater profits based on the consumer's low-carbon preference. Meanwhile, the improved revenue-sharing contract leads to a Paretoimprovement of the efficiency between the manufacturer and retailer, as well as the optimal profits are related to bargaining powers.