Carbon emission reduction decisions in construction supply chain based on differential game with government subsidies

In the context of a low-carbon economy, carbon emission reduction (CER) has become an environmental issue of world concern. As a key industry sector for CER, buildings' CER behavior in the low-carbon building supply chain is affected by the policies of various national governments. This paper fills this research gap by studying and analyzing the CER decision of the construction supply chain under government subsidies with the help of differential game theory and MATLAB numerical analysis software. In this paper, the differential game model with the centralized decision-making (CDM), decentralized decision-making (DDM) and the introduction of cost-sharing contract (CSC) for CER in the construction supply chain under the government subsidies model with developers and contractors as stakeholders in the construction industry are constructed with the help of differential game theory, taking the amount of CER in construction as the state variable, and the optimal feedback equilibrium strategies of both parties in the 3 decision-situations are derived and compared, as well as the optimal trajectory of CER in construction over time. The study found that after the introduction of CSC, the total profit of the construction supply chain under DDM reaches the level of CDM. Complemented by government subsidies, the building CER and the market demand for low-carbon buildings reach optimal values for both parties under DDM.