Research on the cooperative mechanism of government and enterprise for basin ecological compensation based on differential game.

Ecological compensation is an important means of basin pollution control, the existing researches mainly focus on the government level ignoring the important role of enterprises. Therefore, this paper introduces enterprises into the process of ecological compensation. Firstly, suppose the ecological compensation system composed of government and enterprises, the government is in the dominant position. The ecological compensation input of the government and enterprise will produce social reputation, and the ecological compensation of enterprise will also produce advertising effect. Consumer demand will be affected by social reputation and advertising effect. Then, the compensation strategies of the government and enterprise are analyzed by constructing the differential game model. The research shows that under certain conditions, the cost-sharing mechanism can realize the Pareto improvement of the benefits of government, enterprise and the whole system. Under the cooperative mechanism, the benefit of the government, enterprise and the whole system is optimal. Finally, the validity of the conclusion is verified by case analysis, and the sensitivity analysis of the relevant parameters is carried out. The conclusion can provide reference for government to establish sustainable watershed ecological compensation mechanism.

Supply chain carbon emission reductions and coordination when consumers have a strong preference for low-carbon products.

Owing to the rising concerns about environmental degradation worldwide, firms in several developed and developing countries are pursuing carbon emission reduction targets. In addition, in recent years, there is evidence of a shift in consumer preferences in favour of low-carbon products. Using a theoretical model, where the shift in consumer preferences is explicitly incorporated, we evaluate the impact of carbon emission reduction cost-sharing on supply chain profit. In our model, consumers are willing to pay a higher price for low-carbon products and hence the retailer considers sharing the cost of carbon emission reduction with the manufacturer. Our model also includes a carbon trading mechanism. We identify a range of carbon emission reduction cost-sharing such that both supply chain enterprises are better-off. We find that, while achieving the aim of carbon emission reduction, consumer preference for low-carbon products can benefit both supply chain enterprises. Numerical simulations show that carbon emission reduction cost-sharing increases the retailer's order quantity as well as the profit and hence there is an incentive for the two supply chain enterprises to cooperate.